Governor proposes comp reforms to restore New York as national model

Closing unnecessary funds, establishing a bonding program, and creating a pass-through assessment process are among the ideas New York's governor is endorsing. Gov. Andrew Cuomo outlined the proposed changes in his State of the State plan.

Within the first year of his administration, Gov. Cuomo fully implemented the legislative workers' compensation reforms passed in 2007, increased administrative efficiency, and improved medical care to injured workers, according to the report. "However, significant improvements to the New York State workers' compensation system are still needed to restore the state as a national model."

Cuomo said he will introduce legislation to continue to "reduce the cost and improve the administration of workers' compensation for New York's businesses and workers."

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Among the proposals are:

Resolve employer group self-insurance trust liability. Due to the "negligence" of many involved in the group trust business, a large number of group self-insurance trusts began to default in 2006, the report says. Cuomo plans to implement a bonding program with the proceeds going to purchase assumption of liability policies for claims associated with defaulted GSITs. "The legislation will provide immediate savings to these employers, capping employers' outstanding liabilities and giving employers an opportunity to resolve their respective obligations."
Develop a pass-through assessment. The proposal would combine all the workers' comp assessments into one assessment and develop a single process for calculating them, "irrespective of how an employer maintains workers' compensation coverage," the report says. The goal is to address the "overly complicated process to fund the workers' comp system," and the "disproportionate burden on long-term self-insurers."
Close unnecessary funds. The governor says closing the fund for reopened cases, for example, would generate "an immediate annual assessment savings to New York State employers of approximately $300 million." The report said closing unnecessary funds "will provide greater transparency, equity and security to all stakeholders without infringing upon the rights of injured workers."

Read more at the WorkersComp Forum homepage.

February 4, 2013

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