Work comp: Results of Special Compensation Fund assessment

• Since 2021, the Workers' Compensation Report of Benefits Paid (or SCF assessment) is filed via Work Comp Campus.

• Instructions:  How to complete the Workers' Compensation Report of Benefits Paid form and information about possible penalties

• Training:  Benefits reporting for insurers, third-party administrators (TPAs)

  • FAQs from Campus Answer Hour:  Special Compensation Fund assessment, report of benefits

• Results of the reconciliation and final determination of the 2022 SCF assessment 'true-up'

• If you have questions, send a message to dli.assessment@state.mn.us.

Introduction 

The Special Compensation Fund (SCF) assessment funds Minnesota's workers' compensation programs. Most of the assessment dollars goes to funding the supplementary, second-injury, uninsured and occupational disease benefit programs. The assessment also pays the operating expenses of the workers' compensation divisions of the Department of Labor and Industry (DLI), the Office of Administrative Hearings and the Workers' Compensation Court of Appeals.

The SCF assessment is directly invoiced by the Minnesota Department of Labor and Industry. The first half of the assessment is due Aug. 1 every year and the second half is due the following Feb. 1. Invoices are mailed approximately 30 days before the due date. Assessment amounts of $1,000 or less are invoiced with first-half invoices only.

As a result of the 2024 legislative session, forecasted expenditures against the fund have risen to $68.9 million in the coming state fiscal-year. Fortunately, the fund has a moderate cash reserve to offset the increased uses. After applying $5.6 million of the fund balance and $4.5 million in other revenues, DLI's 2024 SCF assessment will be $58.8 million.

The liability was divided between the insurers and self-insurers by the ratio of their 2023 indemnity payments to the total indemnity reported by both groups.

Insurer premium surcharge rate

The insurer premium surcharge rate applied for the purpose of determining the Special Compensation Fund assessment is 4.17%. The rate was determined by dividing the insurer portion of the Special Compensation Fund state-fiscal-year 2025 liability ($42,171,318.18) by the 2023 designated statistical reporting pure premium reported by all insurers ($1,012,172,779).

The amount each insurer is assessed is determined by multiplying 4.17% by the designated statistical reporting (DSR) pure premium for calendar-year 2023. The total amount assessed is divided into two invoices, the first due Aug. 1, 2024, and the second due Feb. 1, 2025 (unless the total amount due is $1,000 or less; then the entire amount is due Aug. 1, 2024).

The insurer portion of the 2024 assessment will be adjusted for actual 2023 data reported by the Minnesota Workers' Compensation Insurers Association. As a result of 2014 amendments to Minnesota Statutes 176.129, subdivision 2a, the current assessment is considered to be an estimate based on the prior year's data. The reconciliation and final determination (true-up) for insurers will be completed by December 2024. See 2014 Minnesota Laws Chapter 182.

Self-insured assessment rate

The self-insured assessment rate is 11.87%. It was determined by dividing the self-insured portion of the Special Compensation Fund state-fiscal-year 2025 liability ($16,628,681.82) by the total 2023 indemnity reported by the self-insured employers ($140,060,485).

The amount each self-insurer is assessed is determined by multiplying 11.87% by the indemnities self-reported to DLI for calendar-year 2023. The total amount assessed is divided into two invoices, the first due Aug. 1, 2024, and the second due Feb. 1, 2025 (unless the total amount due is $1,000 or less).

Further information

If you need further information, send a message to dli.assessment@state.mn.us.