Understanding Maryland Assigned‑Risk Workers' Compensation

What is Assigned‑Risk in Maryland?

In Maryland, the assigned‑risk program guarantees that every business, no matter how small or new, has workers' compensation coverage. If an employer cannot secure a policy through a private insurer, the state assigns a carrier to provide coverage. The system ensures employees can receive benefits for workplace injuries while protecting employers from liability claims.

Who Must Join?

All Maryland employers with at least one employee, including part‑time and seasonal workers, must obtain workers' compensation insurance. The only exceptions are certain exempt occupations such as agricultural and domestic workers. Self‑employed individuals and sole proprietors who do not hire anyone are also required to carry coverage.

Coverage Details

The assigned‑risk carrier provides the same benefits as a private insurer: medical care, temporary disability payments, permanent impairment benefits, and death benefits for families. The coverage limits are set by state law and apply uniformly across all carriers.

Premiums and Payment

Premiums for assigned‑risk carriers are calculated based on the employer's payroll, industry classification, and claims history. Employers pay quarterly, and the state offers a 10‑day grace period for late payments. Failure to pay can result in policy cancellation and potential penalties.

Filing a Claim

When an employee is injured, the employer must file a Workers' Compensation Claim Report within 30 days. The claim is processed by the assigned‑risk carrier, who evaluates medical evidence and determines benefit eligibility. Employees can appeal decisions through the Maryland Workers' Compensation Board.

Key Differences from Private Insurance

Unlike private insurers, assigned‑risk carriers cannot set individual rates; premiums are standardized across the state. Additionally, carriers are required to maintain a state‑approved fund to cover claims, which can provide stability for high‑risk industries. However, employers may have less flexibility in choosing coverage options or negotiating terms.

Benefits for Small Businesses

The assigned‑risk system eliminates the barrier of finding a private insurer, especially for startups or businesses with a high injury history. It also offers a streamlined claims process, as all carriers are bound by the same regulations and benefit schedules.

Common Challenges

Employers often face confusion over payroll reporting, leading to miscalculated premiums. Additionally, the standardization can result in higher costs for low‑risk businesses compared to competitive private rates. Staying informed about payroll changes and maintaining accurate records helps mitigate these issues.

How to Transition from Private to Assigned‑Risk

Employers may voluntarily switch to an assigned‑risk carrier if their current insurer cancels coverage. The transition requires notifying the state and submitting updated payroll information. The state ensures no gap in coverage during the switch.