Mainstay Business Solutions Workers’ Comp Clients Must Secure Another Insurer

The Department of Industrial Relations' office of Self-Insurance Programs (DIR/SIP) revoked the certificate on April 18 after a partial audit determined a shortfall of $4.7 million and revealed that Mainstay's claims were under-reserved by at least $2 to $3 million. Mainstay also failed to post $1.8 million of the $18.7 million security deposit required for its workers' compensation injuries.

All California employers, even those with only one employee, are required by law to have workers' compensation insurance coverage. It can be purchased from a commercial insurance company or from the State Compensation Insurance Fund. It is possible to secure this benefit by a contract with a professional employment or staffing agency. Failure to have coverage may result in an employer being liable for benefits and penalties and possibly facing criminal penalties.

Employers who work with an insurance broker may be able to obtain workers' comp coverage through the broker or get a referral to someone who can provide coverage. Insurance companies providing workers' compensation insurance are listed on the State Department of Insurance at www.insurance.ca.gov/ . The Department of Insurance also has a consumer workers' compensation brochure available at www.insurance.ca.gov/0100-consumers/0060-information-guides/0030-business/workers-comp-insurance.cfm.

The office of Self Insurance Plans (SIP) authorizes qualified employers to provide their own coverage for workers' compensation liabilities. The director of Industrial Relations is responsible for certification of public and private self insured employers, third-party administrative agencies that oversee self insurance programs, and individual claims adjusters. Self insurers are required to post a security deposit -- adjusted annually to cover liabilities incurred -- and to submit to SIP audits.

Share This Article: