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, Freund & Hermantoday.