Minnesota's Senate Bill 3407, introduced on April 22, 2025, aims to tighten the reins on compliance within the state's workers' compensation system. The bill proposes significant changes to the assessment process for the Special Compensation Fund, addressing long-standing issues of late payments and reporting failures by insurers.

At the heart of Senate Bill 3407 is a clear structure for penalties imposed on insurers who fail to meet assessment deadlines. The bill stipulates that for benefits paid between January 1 and June 30, assessments are due by August 15, while those for the second half of the year are due by March 1 of the following year. Insurers, even those no longer licensed or self-insured, must continue to file assessment forms for up to five years after ceasing operations, ensuring accountability in the system.

The proposed penalties escalate based on the duration of the delay, starting at 2.5% for payments made within five days of the due date and reaching up to 15% for payments made over 60 days late. Additionally, a flat penalty of $1,000 or $200 for failure to report zero liability adds further pressure on insurers to comply. This structured approach aims to deter noncompliance and ensure timely funding for the Special Compensation Fund, which supports injured workers.

Debate surrounding the bill has highlighted concerns from some insurers about the potential financial burden of these penalties, particularly for smaller companies. However, proponents argue that the bill is essential for maintaining the integrity of Minnesota's workers' compensation system and protecting the interests of injured workers.

As the bill moves through the legislative process, its implications could reshape the landscape of workers' compensation in Minnesota, potentially leading to more timely payments and improved support for those in need. If passed, Senate Bill 3407 could serve as a model for other states grappling with similar compliance issues in their workers' compensation systems.