IAIABC Annual
Convention 2010
Border Wars: The Fight Over
Coverage For Out of State
Temporary Workers
Border Wars: Out of State Coverage for Temporary Workers

What are the issues?
3C coverage – what does this mean?
 Temporary/Incidental workers
 “Operations” within a state
 National database to report all coverage?
 States need confirmation of coverage and
Carriers need reporting standards
 3A vs.
Border Wars: Out of State Coverage for Temporary Workers
Border Wars: Out of State Coverage for Temporary Workers
Border Wars: Out of State Coverage for Temporary Workers
Border Wars: Out of State Coverage for Temporary Workers



OTHER STATES INSURANCE
A. How This Insurance Applies





PART THREE
1.This other states insurance applies only if one or more states are shown in Item 3.C. of the
Information Page.
2. If you begin work in any one of those states after the effective date of this policy and are
not insured or are not self-insured for such work, all provisions of the policy will apply as
though that state were listed in Item 3.A. of the Information Page.
3. We will reimburse you for the benefits required by the workers compensation law of that
state if we are not permitted to pay the benefits directly to persons entitled to them.
4. If you have work on the effective date of this policy in any state not listed in Item 3.A. of
the Information Page, coverage will not be afforded for that state unless we are notified
within thirty days.
B. Notice Tell us at once if you begin work in any state listed in Item 3.C. of the
Information Page.
Border Wars: Out of State Coverage for Temporary Workers

What do Regulators want/need?
1.
2.
3.
4.
Employers to provide coverage for the protection of
its workers
Certification/Confirmation that State is a “covered
State” under any given policy.
Is the employer complying with statutory
requirements and contractual obligations with the
Carrier?
Protection of the State Trust Fund or Uninsured
Employer Fund.
Border Wars: Out of State Coverage for Temporary Workers

What are my Border States doing?
Reciprocity Agreements in place?
2. Compliance with those agreements?
3. Level playing field for in state employers vs
out of state employers.
1.
Border Wars: Out of State Coverage for Temporary Workers

According to Dictionary.com, the definition of Temporary is “that
which is to last for a limited time, as a statute, or one which is limited
in its operation for a particular period of time after its enactment.
The opposite of perpetual.

According to Dictionary.com, the definition of Incidental is
“happening as an occasional event, without regularity, casual, not of
prime concerns, as in an incidental occurrence.

What does this mean?
All of the states have a definition of their own to define “temporary” or
“incidental” workers.
Some have Reciprocity Agreements; others require certification and some
have both reciprocity and certification requirements.
Border Wars: Out of State Coverage for Temporary Workers
State Statutory Provisions Dealing With Out-of-State Employers Who Have
Employees Temporarily Within A State’s Boundaries

States with Reciprocity Requirements
Workers Temporarily in the State Excluded if:

If the employer’s home state provides for reciprocal treatment of this state’s employees and employers.

CAMTGA (Construction only) NV, ME, OH, MD, SD, MS, UT

Some either in addition to, or in place of, a reciprocity provision specifically authorize the state workers
compensation agency to enter into reciprocal agreements with other states. ID, ME, MN(?), MT and NM.

A number either in combination with a reciprocity provision or as a stand alone provision require the out-of-state
employer who has an out-of-state employee filing a claim to obtain a certificate from the workers compensation
agency of its home state certifying that the employer has workers compensation insurance that provides coverage
for injuries occurring in the state of injury. Many of these provisions also specify that the obtaining of such a
certification constitutes the appointment of the state of injury W.C. agency head or the Secretary of State to be that
employer’s agent for service of process in the state of injury. States having certificate provisions include: CA, DE,
ID, KY, ME, MD, MT, NV, PA, UT.

Some of the states that require the filing of a certificate in lieu of having 3A coverage in their state specifically
provide that the 3C insurer is deemed to be authorized to write in their state for the purposes of handling the claim.
A few provide a temporary authorization for self-insured out-of-state employers who provide proof of their financial
ability to self-insure. The states that deem are: DE, ID, KY, PA.
Border Wars: Out of State Coverage for Temporary Workers
State Statutory Provisions Dealing With Out-of-State Employers Who Have
Employees Temporarily Within A State’s Boundaries

States with Both Reciprocity and Certification Requirements
States having both the reciprocity and certification provisions are: CA, ME, MD, MT, NV and UT. Examples
attached are CA, MD, and MS.

States Providing Special Treatment for Contractors
States having special treatment for contractors include: FL, GA, IL, MT, NM, NV
Florida and Illinois differ from the others in that they reference things like state class codes, rating rules
and manuals and treatment of payrolls.

States With Broad Language Requiring Coverage A
In addition to New York, states with broad language requiring Coverage A include New Hampshire and Iowa.
Although Iowa further has jurisdictional language using “necessary minimum contacts”. New Mexico requires 3A
coverage for contractors, but also seems to have a broad test if the employer has three or more employees
working in the state even on a temporary basis. The Iowa and New Hampshire provisions are attached.

Interesting Provisions Not Previously Discussed
There are states that have provisions which may be of some interest which are discussed below. There also are a
number of state provisions dealing with situations in which a worker may claim in more than one state that address
whether claims may be filed in more than one jurisdiction, benefit levels, and exclusive remedy which will not be
discussed because of our focus on coverage of workers temporarily in a state.
Border Wars: Out of State Coverage for Temporary Workers
State Statutory Provisions Dealing With Out-of-State Employers Who Have
Employees Temporarily Within A State’s Boundaries
Administrative Feasibility States
Arizona, Hawaii and Vermont have similar language that provides: if a worker hired outside of the state is injured while
engaged in his employer’s business, and is entitled to compensation for the injury under the law of the state of hire,
he may enforce against his employer his rights in this state, if they are such that they can reasonably be determined
and dealt with by this workers compensation agency and the courts of this state.
States Having Statutory Tests
Maine has the most detailed statutory test. It provides that an employee employed in another state and his employer are
exempt while the employee is temporarily in Maine doing work for his employer if:
1.
2.
3.
the employee is not a resident of Maine and was not hired in Maine;
the employer does not have a permanent place of business in Maine; and
the employee’s presence in Maine for conducting employment activities doesn’t exceed any of the following periods:
a.
b.
c.
five consecutive days
ten days in a 30 day period
thirty days in any 360 day period; and
The employer has furnished workers’ compensation coverage under the workers compensation law of the other state so as
to cover the employee’s employment while working in Maine; and the other state has reciprocal provisions. The Maine
provision is attached.
Connecticut states that employee does not include any person not a resident who is injured in the state in the course of
employment unless he works for an employer having a place of employment or business facility in Connecticut at
which the employee spends at least 50 percent of employment time or who works for an employer pursuant to an
employment contract to be performed primarily in Connecticut.
Border Wars: Out of State Coverage for Temporary Workers
State Statutory Provisions Dealing With Out-of-State Employers Who Have
Employees Temporarily Within A State’s Boundaries
Other Unique Provisions:
The District of Columbia provides if the employee and employer are nonresidents of the District and the contract of
hire was entered into in another jurisdiction, they are exempt when the employee is temporarily or intermittently in
the District doing work for the employer if the employer has workers compensation coverage in the other
jurisdiction so as to cover the employee’s employment while in D.C.
Hawaii provides that any employer whose principal place of business is outside of Hawaii shall prior to
commencement of employment within the state shall register with the director the employer’s name, approximate
total wages to be paid, and dates of employment activity within the state. In addition, the employer shall file a
prescribed notice of insurance.
Border Wars: Out of State Coverage for Temporary Workers

What is happening in Massachusetts?

Per the MA website, Out of State employers do not need to
buy a policy strictly for MA if the existing policy lists MA in
Section 3.A of the policy’s Information Page. If MA is listed in
3.C, the policy is acceptable only if the Insurer verifies the
coverage in MA. Furthermore, any notation in 3.C that “all
states are covered” of “all states are covered except those
listed in 3.A and the States of ND, OH, WA and WY” or
something similar is acceptable only upon verification of
coverage by the Insurer.
Border Wars: Out of State Coverage for Temporary Workers

What is happening in Massachusetts?
Stopping truckers at the border?
 “Sweeps” of Construction sites
 Turning away convention attendees?
 Casing the airports and train states?
 MA investigation process – some history
 Form 154

Border Wars: Out of State Coverage for Temporary Workers
Border Wars: Out of State Coverage for Temporary Workers

What are the goals for MA and others?
1.
2.
3.
4.
Employers to provide coverage for the protection of
its workers
Certification/Confirmation that State is a “covered
State” under any given policy.
Is the employer complying with statutory
requirements and contractual obligations with the
Carrier?
Protection of the State Trust Fund or Uninsured
Employer Fund.
Border Wars: Out of State Coverage for Temporary Workers
Sound familiar…..

What do Regulators want/need?
1.
2.
3.
4.
Employers to provide coverage for the protection of
its workers
Certification/Confirmation that State is a “covered
State” under any given policy.
Is the employer complying with statutory
requirements and contractual obligations with the
Carrier?
Protection of the State Trust Fund or Uninsured
Employer Fund.
Border Wars: Out of State Coverage for Temporary Workers

Discussion with Ray Marchand, Chief Investigator with
the Workers’ Compensation Board of the Commonwealth
of MA

Form 154 revisited

Working together to bring employers into compliance
Border Wars: Out of State Coverage for Temporary Workers

Other States struggling with the issues





New York – public projects require coverage or certificate of
insurance. Do carriers uphold 3C coverage?
Wisconsin does not recognize 3C coverage – defines
“operations” as $500 of payroll/calendar quarter or more than 3
people at any one time.
Pennsylvania – Ohio employer with PA resident employee
working in PA and OH fund does not recognize the PA worker
so PA Uninsured employer fund must pay.
Idaho – requires out of state employers to add ID under a 3A
policy. Existing reciprocity agreements with border states are
now exempting reciprocity for construction industry. No cross
border workers without coverage in the state.
How many other States are struggling with this issue?
Border Wars: Out of State Coverage for Temporary Workers
Is there a better way to present coverage?
 Why do we refer to it as 3A vs. 3C?
 Is there any coverage difference?
 Any workers’ claims not covered?

Border Wars: Out of State Coverage for Temporary Workers



This is not just an insurance issue – how are
self-insured employers impacted?
Are 3A/3C covered employers the real problem?
Where do we go from here?
 Define
“temporary” worker?
 Revamp reciprocity agreements?
 National database for reporting all coverage?

Next Steps?