New York State Fund Is Not The Carrier You Want To Owe Money

New York State Fund Has More Power Than Any Carrier

 

If a NY employer owes unpaid premium to the State Insurance Fund (NYSIF) and the employer is owed money by a branch of New York state government, the State Fund has an expedited method of collecting. It can, and almost certainly will, see that the premium is withheld from payments due on any contract with state government, an advantage no private carrier possesses. Furthermore, this method bypasses such details as a lawsuit.

 

The basis for this is contained in a decision this week from the Appellate Division, Third Department – “Suburban Restoration, Inc. v Office of the State Comptroller”, NY Slip Op 070221. The decision recognizes that NYSIF is, for nearly every purpose, a state agency, although it is uniquely paid by assessments on insurance companies, not by taxes.

 

 

 

Connected to Inner Workings of Central Computer

 

That might seem to be a small distinction but it leads to a feature which confers upon it enormous power – it, alone among comp carriers, is connected to the inner workings of the central computer of the State of New York. It is, therefore, a mouse-click away from all the information it needs to collect any unpaid premium from a contract with the State of New York.

 

It is generally supposed that the decision will mainly affect construction contracts, but it could equally apply to selling pencils and paper to SUNY. In turn, many employers might wish to rethink using a comp carrier that can bypass every legal protection and unilaterally demand, and collect, payments.

 

 

 

Disputes Heard in Court of Claims

 

If the employer wishes to dispute the charges and collections there is a double surprise awaiting. As long as there is unpaid premium (or ALLEGED unpaid premium) access to new state contracts may be cut off. And legal disputes cannot be brought in the regular state courts – they must be heard in the Court of Claims, a court which handles suits against the state and which, it is rumored, tends to see the state’s point of view a bit more clearly than other courts.

 

 

Author: Attorney Theodore Ronca is a practicing lawyer from Aquebogue, NY. He is a frequent writer and speaker, and has represented employers in the areas of workers’ compensation, Social Security disability, employee disability plans and subrogation for over 30 years. Attorney Ronca can be reached at 631-722-2100. medsearch7@optonline.net

 

Editor Michael B. Stack, CPA, Director of Operations, Amaxx Risk Solutions, Inc. is an expert in employer communication systems and part of the Amaxx team helping companies reduce their workers compensation costs by 20% to 50%. He is a writer, speaker, and website publisher.  www.reduceyourworkerscomp.com.  Contact:  mstack@reduceyourworkerscomp.com.
WORKERS COMP MANAGEMENT MANUAL:  www.WCManual.com
MODIFIED DUTY CALCULATOR:  www.LowerWC.com/transitional-duty-cost-calculator.php

 

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.

 

©2012 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact us at: Info@ReduceYourWorkersComp.com.

 

3 Reasons New York Workers Comp Assessments Are Through the Roof

NY Fees over 18%

 

An employer pays, in addition to the comp premium, an assessment for the operating costs of the Workers’ Compensation Board and certain “special funds”, principally the Second Injury Fund  and a fund for claims that have been closed for several years and reopened. Other states have these surcharges, amounting to a few percent of premium, but only New York has an assessment over 15% (currently over 18%). Why?

 

 

Reason #1: Bigger is Better

 

The answer, if it can be called an answer, seems to lie in a “bigger is better” attitude which has been part of New York comp for over 80 years. New York comp is also superlative in number of comp hearings, trials and appeals, so much so that at one time the annual number of hearings was over 600,000 and the number of appeals, 40,000 per year, exceeded the number of hearings in even the largest of states.

 

The number of hearings was so great that a research institute studying the NY comp system at first concluded that the number of hearings had an extra zero added by mistake. (Hearings are currently at 200,000/yr, or less.)

 

To manage all this, the NY comp board required over 1,500 employees, which was more than the combined comp board staffs of all states east of the Mississippi (if Florida is not included).

 

 

Reason #2: Second Injury Fund Payments

 

NY also led in second injury fund payments. A second injury fund pays most of an employer’s comp claim if the worker had a previous serious permanent injury. What drove the payments to the highest in the nation was the NY board’s stunning number claims for “permanent partial disability”, an award that was infrequent to rare in other states but was present, or at least possible, on nearly every claim in NY involving a back. Since extended disability on back claims was greater for older workers, second injury fund was usually involved. Older workers have the bulk of preexisting disability.

 

 

Reason #3: Reopened Cases

 

Finally, the assessments for “reopened cases” were anomalously high in NY. A back claim which remained open would in all likelihood continue to be litigated. But if the attorney asked that the claim be declared a permanent partial disability, but be closed without awards, the board would grant the request.

 

Such claims would be “warehoused” by the law firms as future assets. When the worker retired, the claim would be reopened and considered for permanent partial disability settlement since, it was claimed, the worker had retired in part due to the disability. (This has since been changed and future claims are more likely to be treated as voluntary retirements not qualifying for settlements, but many still in the pipeline must be paid for by the fund for reopened claims.)

 

 

Can Assessments Ever Come Down?

 

That, in brief, is why the assessments are so high. Can they ever come down to the level of the national average? Certainly, when it is recognized how they came to be so high in the first place, and there is hope for the future.

 

First, the number of reopened claims will diminish, since the new law for maximum amounts of future payments for permanent disability are a hindrance to “warehousing”. Then, the Second Injury Fund is in the process of being closed. Although that will take years there will be a steady decrease in payments each year.

 

The last factor, board expenses, will be a bit more difficult. The board has never shown an interest in substantial reduction of its total staff. It was predicted that the change from paper files to e-files would greatly reduce the staff, but that is still in the future, if ever. (Imagine the work hours which were necessary to transport paper files for 600,000 hearings a year to hearing points dozens of miles from the point of storage.)

 

So, the assessments, slowly, will come down. But they have a long way to go.

 

 

 

Author: Attorney Theodore Ronca is a practicing lawyer from Aquebogue, NY. He is a frequent writer and speaker, and has represented employers in the areas of workers’ compensation, Social Security disability, employee disability plans and subrogation for over 30 years. Attorney Ronca can be reached at 631-722-2100. medsearch7@optonline.net

 

Editor Michael B. Stack, CPA, Director of Operations, Amaxx Risk Solutions, Inc. is an expert in employer communication systems and part of the Amaxx team helping companies reduce their workers compensation costs by 20% to 50%. He is a writer, speaker, and website publisher.  www.reduceyourworkerscomp.com.  Contact:  mstack@reduceyourworkerscomp.com.
WORKERS COMP MANAGEMENT MANUAL:  www.WCManual.com
MODIFIED DUTY CALCULATOR:  www.LowerWC.com/transitional-duty-cost-calculator.php

 

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.

 

©2012 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact us at: Info@ReduceYourWorkersComp.com.

 

New York Makes Strides with New Rules for Changing Hearing Point

Hearings Automatically Set for County in which Worker Resides

 
The NY Work Comp Board published on 7/3/12 established new rules for changing the hearing point (“Rule on Request for Venue Change, Subject No. 046-486). The hearings are automatically set for the county in which the worker resides, unless the worker resides out of state, in which case the worker can ask for a particular county. Special rules apply if the employer is a governmental body, in which case, hearings must be held in the same board district where the governmental body has offices.
 
After that, a change can only be made if the worker requests it in writing and gives a good reason for a change. The senior comp judge rules on the request and gives a written opinion.
 
 
New System Significant Improvement from Decades Past
 
In decades past, changes in hearing points resembled a game of dysfunctional musical chairs. The principal reasons for changes, especially in the New York City area, had nothing to do with the wishes of the worker or the convenience of witnesses – it had everything to do with the local culture of the comp system and, most importantly, how attorney fees were awarded.
 
Employers should be kept aware of any requests for a change in hearing points. A change should not be granted for the convenience of a medical witness since medical testimony is now taken by telephone depositions and no longer at hearings. It is no more difficult to take the deposition of doctors in Florida than doctors locally as the procedures are the same.
 
In the past, attorneys would ask that a change of hearing point be made to inconvenience the employer’s witnesses – using a worker’s remote address of a relative. The employer was sometimes directed to have three or four witnesses appear at a point hundreds of miles away, only to be informed, when they arrived, that the hearing was adjourned. Since depositions are now used, that gambit no longer works.
 
 
Employer Should be Updated on Requests for Changes
 
An employer should be kept in the loop on requests for changes of hearing point and should review the application to see if any reasons for a change are given that appear to contradict facts. If the request is not in accordance with known facts, a reply should be made.
 
 
 

Author: Attorney Theodore Ronca is a practicing lawyer from Aquebogue, NY. He is a frequent writer and speaker, and has represented employers in the areas of workers’ compensation, Social Security disability, employee disability plans and subrogation for over 30 years. Attorney Ronca can be reached at 631-722-2100. medsearch7@optonline.net

 

Editor Michael B. Stack, CPA, Director of Operations, Amaxx Risk Solutions, Inc. is an expert in employer communication systems and part of the Amaxx team helping companies reduce their workers compensation costs by 20% to 50%. He is a writer, speaker, and website publisher.  www.reduceyourworkerscomp.com Contact mstack@reduceyourworkerscomp.com


WORKERS COMP MANAGEMENT MANUAL:  www.WCManual.com
MODIFIED DUTY CALCULATOR:  www.LowerWC.com/transitional-duty-cost-calculator.php

 

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.

 

©2012 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact us at: Info@ReduceYourWorkersComp.com.

New York State Workers Compensation Board Moves to Electronic Employer Report of Injury System

The New York State Workers Compensation Board has announced that it will transition from a paper to an electronic employer report of injury system by adopting the IAIABC (International Association of Industrial Accident Boards and Commissions) Claims Electronic Data Interchange (EDI) Standard Release 3.0. Founded in 1914, the IAIABC is a not-for-profit trade association representing government entities who administer workers comp systems.

 
Currently, the Board accepts New York-specific claims information from employers and insurance carriers through paper submission. Beginning in early 2013, these submissions will be required to match the IAIABC standard and be made electronically. .[WCx]

 

"Electronic filing will reduce system waste and increase efficiency, meaning businesses will save while injured workers will receive their benefits faster," the Board’s Executive Director Jeffrey Fenster said. "We are working closely with employers and insurers in the workers compensation industry to ensure a seamless transition to electronic filing."

 

More than 30 states currently use or are planning to use the IAIABC EDI standard for claim submissions. Most national insurance carriers already utilize this standard. The technology is recognized as the national best practice for workers comp injury reporting. The Board will implement the mandate of electronic reporting in phases beginning with those national carriers that use IAIABC EDI in other states. .[WCx]

 

Based on the experience of other states that have implemented the IAIABC standard, the Board anticipates that its adoption in New York will yield significant benefits, including:

 

  1. Improving the timely delivery of benefits to injured workers.
  2. Providing a single, consistent data format.
  3. Reducing waste, abuse, and delay in the system.
  4. Reducing paper handling costs to system participants outside the Board, i.e., handling, completing, and shipping. 
  5. Reducing high costs to the Board for handling, processing, and scanning paper documents as well as certain data entry costs. 
  6. Reducing duplicative claim form filings. 
  7. Increasing the quality and timeliness of information received by the Board. 
  8. Improving data collection for system oversight and policy making.

 

Mario Cilento, president of the New York State AFL-CIO, noted, "The heart of the workers compensation system is delivering benefits to injured workers when they need them. Labor supports implementing the new paperless standard, which will quicken the delivery of benefits. Anytime we can streamline that process without compromising the integrity of the system, injured workers are better served. The data collected will also lead to improved information for policy-making in the future. We appreciate the Board's efforts to improve the delivery of service in this area."

Author Robert Elliott, executive vice president, Amaxx Risk Solutions, Inc. has worked successfully for 20 years with many industries to reduce Workers Compensation costs, including airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality and manufacturing. He is an editor and contributor to Workers Compensation Management Program: Reduce Costs 20% to 50%. Contact: Info@ReduceYourWorkersComp.com.

 

 


WORKERS COMP MANAGEMENT MANUAL:  www.WCManual.com

VIEW SAMPLES PAGES

MODIFIED DUTY CALCULATOR:  www.LowerWC.com/transitional-duty-cost-calculator.php

 

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.

 

©2012 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact us at: Info@ReduceYourWorkersComp.com.

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