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A recent Appeals Court decision confirms that employer insolvency is not a valid basis for denying reimbursement from the Workers Compensation Trust Fund under G.L.c. 152, § 65 . Massachusetts Lawyers’ Weekly published an article quoting Melick & Porter Member, Robert Powers, commenting on the court’s decision.
Under G.L.c. 152, § 65, the Worker’s Comp. Trust Fund shall not provide reimbursement of benefits “to any non-insuring public employer, self-insurer or self-insurance group, which has chosen not to participate in the fund.”
Background on the Dispute
The Employer’s Reinsurance Corporation (ERC) sought to obtain reimbursement of cost-of-living adjustment (COLA) benefits paid to a former Polaroid employee under the terms of a reinsurance policy with the self-insured employer. When Polaroid filed for bankruptcy in 2004, ERC began paying the employee’s base salary and COLA. Unlike ERC’s base benefit payments, the trust fund did not reimburse the insurer for its COLA payments.
The Department of Industrial Accidents’ (DIA) review board denied ERC’s claim for reimbursement, relying on the Appeals Court’s 2015 decision in Home Insurance Co. v. Worker’s Compensation Trust Fund. In Home Insurance, the court denied a reimbursement claim on grounds that the insurer was no longer writing policies. This “decision came out of a desire to achieve something that was right and fair,” Robert Powers said. “In that case, the board was saying that we’re a ‘pay-as-you-go’ system and, if we’re not getting the funds in, we shouldn’t be obligated to reimbursement.”
The Appeals Court’s Reversal
Following the analysis of Home Insurance, the DIA review board concluded that ERC was not entitled to reimbursement as its insured, Polaroid, was insolvent. When the ERC appealed, the panel recognized that Home Insurance had been overruled by the Appeals Court in 2024 and then on review by the Supreme Judicial Court in 2025 in the case Arrowood Indemnity Co. v. Workers’ Compensation Trust Fund.
While the Home Insurance decision seemed fair at the time, Powers said “the Appeals Court and SJC recognized in the later Arrowood case that [the decision] did not comport with the language of G.L.c. 152, § 65.”
Robert Powers sees the Arrowood cases as a course correction from the Appeals Court’s decision in Home Insurance. “I just see [the courts] going back to the principle that the statute says what the statute says, and our job as a court is to interpret the statute,” Powers said. “And if the statute says there are three exceptions, there are three exceptions, and we can’t rewrite it.”
The Ruling
The Appeals Court ruled the DIA wrongly denied an insurer’s request for reimbursement of COLA payments from the Worker’s Comp. Trust Fund pursuant to G.L.c. 152, § 65. Because Polaroid was a participating self-insurer at the time of the injury, ERC was a valid insurer under G.L.c. 152, § 65, and because insolvent employers do not fall into one of the three statutory exceptions, the Trust Fund could not deny reimbursement of the COLA benefits.
Key Take Away
This “course correction” restores the principle that G.L.c. 152, § 65 enumerates only three exceptions to reimbursement and the Workers’ Comp. Trust Fund cannot expand on those categories.
To read the full article, please visit https://masslawyersweekly.com/2026/02/18/appeals-court-workers-comp-trust-fund-cola-reimbursement/.