Workers' Compensation Commission budget edges up as new case system, vacancies and Uninsured Employers Fund raise concerns

Micah Richardson, a budget analyst with the Maryland Department of Legislative Services, told the Public Safety and Administration Subcommittee that the Workers' Compensation Commission's fiscal 2026 allowance rises by about $656,000 from fiscal 2025 to roughly $24,000,000 and that personnel costs account for about 72% of the agency's budget.

The presentation and subsequent exchange centered on operational issues tied to the commission's recent CompHub IT modernization, staffing and continuing concerns about the solvency and administrative costs of the Uninsured Employers Fund (UEF). The DLS report noted a sharp drop in hearings scheduled within the agency's 60‑day target and flagged UEF expenditures that have exceeded revenues in recent years.

DLS analyst Micah Richardson said the fiscal 2026 budget "increases by around $656,000 compared to the fiscal 25 appropriation to a total of around $24,000,000" and that 72 percent of that total "supports personnel costs." He told the committee that the single largest year‑over‑year increase is about $1,600,000 for salaries, primarily reflecting cost‑of‑living adjustments carried in fiscal 2025. Richardson also summarized the CompHub modernization as a completed project that reduced the FY‑26 budget by about $2,500,000 because the major capital work finished in December 2024; DLS recorded the total CompHub project cost as $23,900,000.

Maureen Quinn, chair of the Workers' Compensation Commission, told members the agency invested in the CompHub system to avoid catastrophic failure of its legacy platform, secure medical records and move toward paperless operations. "For the last 6 months, we have noticed that the number of cases awaiting hearing... is very low," Quinn said, adding that the commission is watching whether that reduced pending caseload is a temporary artifact of implementation or a longer‑term shift that could affect courthouse schedules and positions such as court reporters and security.

Quinn said the commission has reclassified 43 jobs to better reflect changing work following automation and that 42 of 111 full‑time employees are 60 or older. She described substantial pay disparities discovered in an internal salary review and provided an example in which five employees in one unit collectively needed about $63,000 in raises to align pay among colleagues. "The story is about this disgraceful discrepancy in pay," she said.

On the UEF, DLS and the commission said the fund's finances merit attention. The joint chairman's report asked the Workers' Compensation Commission and the UEF to form a work group to study UEF funding and operations. DLS noted that, as of Sept. 30, 2024, UEF's fund balance was about $7,000,000 (up from a fiscal‑24 closing balance of roughly $5,000,000), but exhibits in the DLS analysis show expenditures exceeding revenues in fiscal 2023 and fiscal 2024, with rising administrative costs cited as a primary driver.

Richardson and Quinn highlighted the role of CorVel, the UEF's third‑party administrator (TPA). DLS reported that, if UEF data are accurate, CorVel handled payments totaling about $25,000,000 that the fund paid, including about $11,500,000 over the last five years. The Board of Public Works approved continuing CorVel as the TPA through Oct. 31, 2029, approval that the DLS summary said would result in CorVel receiving about $8,400,000 by the end of the contract term. DLS and WCC noted concerns that the contract's cost ratio may not align with industry standards and that projected administrative costs remain high.

The Commission returned a list of operational and legislative recommendations. Nonlegislative options the WCC identified include transferring claims management in‑house, employing a private collections agency on commission to pursue debt owed to UEF, and reducing the fines and penalties collection process. Items WCC said would require statutory change include supporting a one percentage point increase in the assessment on awards and settlements, repealing a suspension (not further specified in testimony) to give UEF more flexibility, and redirecting civil penalties recovered for workplace fraud from the general fund to UEF. WCC said it does not support making reserve setting mandatory and opposed transferring $10,000,000 from the Subsequent Injury Fund to UEF.

DLS asked the commission to comment on whether a monitor or overseer should evaluate UEF administration, on suggested assessment increases and on mandatory reserve settings; Quinn said the commission had recommended a monitor and noted difficulties in obtaining and sharing complete UEF data with the work group during contract renewal and Board of Public Works consideration. She told the panel she has "recommended that there be a monitor... to examine the data that the UEF has" and suggested reporting to the revived Joint Oversight Committee on Workers' Compensation.

Committee Chair Jazz Lewis and members did not take formal action during the hearing. Analysts and the commission agreed that legislative attention to UEF governance, TPA oversight and potential revenue adjustments will be needed to address long‑term solvency and administrative cost issues.

Looking ahead, DLS said it would seek further comment from WCC on CompHub operational impacts and ongoing maintenance costs, and WCC said it would provide additional information about staffing, training and the proposed monitor for UEF.