New York City, NY (CompNewsNetwork) – New York State Workers’ Compensation Board Chairman Robert Beloten today announced that the newly adopted New York State budget includes more than $200 million in assessment relief for thousands of small businesses who are members of a defaulted or inactive Group Self-Insurance Trust (GSIT).
While former members of insolvent GSITs remain responsible for their trust’s liability, they will see a nearly 20 percent reduction in the amount owed to the Board in administration and other special fund assessments. Businesses that are members of solvent, inactive trusts will see the same relief.
The budget also restructures the Group Self-Insurance program in New York to ensure its future solvency by strengthening security deposit requirements, broadening the Board’s enforcement powers and increasing transparency with more robust reporting requirements.
Group trusts must now post a security deposit at least equal to their claims amount. Failure to do so will result in their takeover by the Board. In addition, every six months the Board will report to both the governor and legislature the total amount of claims liability of insolvent group trusts; the degree to which each qualifying group trust is fully funded; and the actions the Board has taken to extinguish outstanding liabilities thorough settlements, loss portfolio transfers, and collections from defaulted group trust members.
“This is a transformational budget for the Group Self-Insurance program in New York,” Beloten said. “Small businesses across New York who were members of group trusts will see welcome assessment relief, while injured workers can rest assured that the benefits they are entitled to have been protected.”
It is expected that the assessment relief offered by this budget measure will increase the ability of members of defaulted GSITs to settle their outstanding liabilities through an Assumption of Workers’ Compensation Liability Policy (ALP). ALPs mitigate self-insurers’ long term liabilities associated with both claims and assessments by transferring that liability to a private insurance carrier. This remedy allows businesses that were part of a defaulted GSIT to settle long term exposure for a fixed price.
“The ALP approach helps businesses by capping future claims liability and simultaneously ensuring the uninterrupted flow of benefits to their injured workers in the future,” Beloten concluded.
The Board executed its first ALP on behalf of a defaulted group trust earlier this month.
The New York State Workers’ Compensation Board is responsible for administering both Individual and Group Self-Insurance programs for workers’ compensation in New York. For more information on the new Group Self-Insurance requirements and the Assumption of Workers Compensation Liability Policy program please contact the Office of Self-Insurance at 518-402-0247.