Washington, DC – The American Insurance Association (AIA) announced its support of Governor Andrew Cuomo’s (D-NY) proposals to simplify and strengthen New York’s workers’ compensation system. Gov. Cuomo’s legislative proposals, which were recently released as part of the 2013-2014 Executive Budget are designed to achieve the following changes to New York’s workers’ compensation system and save New York’s employers an estimated $500 million without adversely affecting workers’ rights:
- Simplifying and rationalizing the assessment mechanism for the workers’ compensation system; employers would be assessed on their pro-rata share of premiums, regardless of how they secure their workers’ compensation coverage.
- Closing to new cases the aggregate trust fund and the reopened cases fund, with transfers to the aggregate trust fund ceasing immediately.
- Issuing bonds to cover the $800 million in liabilities of the self-insured group trusts.
- Increasing from $100 to $150, the minimum weekly benefit for injured claimants.
“Governor Cuomo has taken an important step in reforming the workers’ compensation system, which should save New York’s businesses money,” said Gary Henning, AIA Northeast region vice president. “AIA applauds the governor for his proposal and looks forward to working with the legislature towards meaningful reform.”
Governor Cuomo’s proposals are designed to simplify the workers’ compensation system by having the state determine a single assessment methodology, allowing private insurers to easily collect this assessment from policyholders and transmit it to the state. Currently, carriers receive 14 different invoices for five separate funds annually, with the different funds using different years as the basis for their assessment.
“AIA’s member companies, private insurers providing workers’ compensation coverage, recognize that New York’s current system creates unnecessary administrative burdens and costs,” said Henning. “Gov. Cuomo’s proposals seek to streamline the process, allowing insurers to better serve the needs of the policyholder.”
AIA supports Gov. Cuomo’s proposals to close the aggregate trust fund and the reopened cases fund. While these funds may have served a purpose when originally instituted, they now simply add costs to the system without providing any benefits to injured workers.
“It is time for these funds to be phased out,” concluded Henning.
Gov. Cuomo’s budget presentation may be found here, with the workers’ compensation reforms being outlined on pages 190-276: http://publications.budget.ny.gov/eBudget1314/fy1314artVIIbills/PPGGArticleVII.pdf (PDF)
For the legislative memorandum of support, please visit: http://publications.budget.ny.gov/eBudget1314/fy1314artVIIbills/PPGG_ArticleVII_MS.pdf
Source: AIA