Despite the fact that the Workers' Compensation Fund for the New York State Insurance Fund has shown a significant year-ending surplus for both 2010 and 2011, Governor Cuomo is working hard to give close to 10,000 businesses a break on the $800 million worth of workers' compensation liabilities amassed due to the failure of numerous group insurance trusts. Because of the rising costs associated with obtaining workers' compensation through the State Insurance Fund over the last decade or so, many businesses opted to unite under group insurance trusts in an effort to lower workers' compensation costs and share potential liabilities. Unfortunately, many of those trusts ended up struggling or eventually going under, thus leaving their members (the businesses themselves) openly exposed to numerous claims and a massive liability pool.
Although efforts have been made by the Workers' Compensation Board to assess the businesses in order to cover the unexpected burden they were left facing, many businesses were either forced to negotiate lower payment schedules just so they could keep their doors open or they have completely failed to meet the earlier assessed payments. Governor Cuomo's proposal would authorize the Dormitory Authority of the State of New York to issue bonds to cover the liabilities. Following that, the bonds would be sold, at a discount, to insurance companies who wished to use them as an investment. Businesses, who were earlier members of the trusts, would then pay off the bonds over a longer period of time and at a newly assessed level, which the Governor anticipates to be significantly less than the earlier amount they had to pay.
Businesses in New York, and throughout the U.S., are required to have workers' compensation insurance to cover any manner of injuries their employees may sustain while on the job. In the state of New York, workers' compensation covers employees regardless of whether they are full-time, part-time or leased workers. Even volunteers, who are working for a profitable business, may qualify for occupational injury compensation benefits. This can lead to hefty costs for a small, and/or struggling businesses. Hopefully, the currently proposed changes, and the anticipated state restructuring of the entire workers' compensation program, will make coverage a lot more feasible in the future.
If you have questions about workers' compensation laws, or want to know how the proposed changes may affect you, please contact a New York workers' compensation lawyer at Katz Leidman Grossman Wolfe & Freund today.