Maryland's Core Requirement
All Maryland employers with one or more employees, regardless of full‑time or part‑time status, must carry workers' compensation insurance or obtain a state‑approved self‑insurance certificate.
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Coverage Thresholds and Exemptions
There is no minimum payroll threshold; even a single employee triggers the obligation. The only common exemption is for sole proprietors who do not employ anyone else.
Approved Insurance Options
Employers may purchase coverage from a licensed private insurer, use the state‑run Maryland Workers' Compensation Insurance Fund (MWCIF), or secure a commercial insurance policy that meets Maryland's statutory standards.
Self‑Insurance and Certification
Businesses with a strong financial rating can apply for self‑insurance through the Maryland Workers' Compensation Commission (MWCC). The application requires a detailed financial statement, a safety‑loss history, and a bond or cash deposit as security.
Reporting and Payroll Reporting
Employers must file an annual payroll report (Form MW-1) with the MWCC, detailing total wages for each class of employee. The report is due by February 28 for the preceding calendar year.
Penalty Structure
Failure to secure coverage or file required reports can result in:
- Daily fines of $50 per uninsured employee
- Potential civil liability for medical and wage benefits
- Loss of the right to defend against workers' compensation claims in court
Key Deadlines
Coverage must be in place before the first day an employee performs work. The annual payroll report is due February 28, and any changes to coverage must be reported within 30 days.
Comparison of Coverage Options
| Option | Typical Cost | Administrative Burden |
|---|---|---|
| Private Insurer | Varies by industry and payroll | Moderate – annual renewal and reporting |
| MWCIF (State Fund) | Often lower for high‑risk sectors | Low – standardized forms |
| Self‑Insurance | High upfront capital | High – ongoing financial audits |