Uninsured Employers' Fund - Assessments and Special Monitor
Summary
SB219 makes several changes to Maryland’s Uninsured Employers’ Fund (UEF), which pays workers’ compensation claims when an employer failed to carry required insurance. The bill increases the circumstances under which assessments on awards and settlements are collected or suspended, and raises the Fund’s reserve thresholds that trigger suspension and resumption of those assessments. It also changes the maximum additional assessment the UEF Board may direct when reserves are inadequate, reducing the prior ceiling from 2% to 1.5% above the base assessment.
The bill also requires the Workers’ Compensation Commission to appoint a special monitor to review the Fund’s financial condition, including reserve-setting practices and use of third-party administrators. The monitor must issue an interim report by December 1, 2025 and a final report by June 1, 2026, and the Fund must provide $100,000 to support that work. The monitoring provision is temporary and expires after one year.
Impact
SB219 amends Labor and Employment Article §§ 9-1007 and 9-1011, affecting how the Uninsured Employers’ Fund is financed and when employers and insurers must pay assessments. It increases the reserve levels at which assessments are suspended and resumed, and authorizes a smaller additional assessment than under prior law when the Fund’s reserves are inadequate. The bill also creates a short-term oversight mechanism through a special monitor, adding a one-year reporting and review requirement aimed at evaluating the Fund’s financial stability and administrative practices.
Sentiment
The bill appears to have generally favorable legislative support, as reflected by its favorable committee report and passage on third reading in both chambers. The voting margins suggest broad approval overall, though not unanimous, indicating some concern about the policy changes or their fiscal effects. The inclusion of a special monitor and reporting requirement suggests lawmakers were attentive to the Fund’s financial condition and wanted additional oversight alongside the assessment changes.
Contention
The main points of contention likely center on the size and timing of assessments imposed on employers and insurers, especially the higher reserve thresholds and the revised cap on additional assessments. Employers, insurers, and other stakeholders subject to the assessment may view the changes as increasing costs or shifting financial burdens, while supporters likely argue the changes are needed to keep the Fund solvent and better managed. The special monitor provision also signals concern about reserve-setting and third-party administrator practices, suggesting that the Fund’s financial management was a significant issue behind the bill.