A state judge ruled New York’s Workers’ Compensation Board was unconstitutionally taxing financially sound insurance trusts.
On April 14, acting state Supreme Court Justice Kimberly O’Connor ruled the 2008 laws should be considered unconstitutional, as were the Workers’ Compensation Board’s assessments.
According to The Business Review of Albany, 13 self-insured groups sued after the board increased assessments in order to cover approximately $450 million of losses incurred as the result of other, unrelated trusts that defaulted and are accused of fraud.
Self-insured groups encompass employers in the same industry who pool their premium payments to pay for claims. The 13 groups involved in suing the state represent more than 7,000 public and private employers.
The workers’ comp board is appealing the ruling. By doing so, it freezes any impacts of the ruling while an appellate court reviews the matter.
State laws enacted two years ago altered how self-insured workers’ comp groups are regulated. The 13 healthy trusts claim the new laws were the reason their assessments increased so dramatically. (workersxzcompxzkit)
In 2007, the 13 groups had an aggregate assessment of $104,000. In 2008, assessments went up to $11.1 million. Due to the new law, the groups decided to dissolve, claiming the altered law made them uncompetitive.
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