NY Governor Aims to Bail Out WC Problem
Thousands of New York businesses are getting help resolving workers’ comp claims. Gov. Andrew Cuomo announced the state is issuing $370 million in bonds to assist businesses in failed group self-insured trusts.
The governor’s 2013 Business Relief Act authorizes the Workers’ Compensation Board to use the proceeds to buy insurance to pay the claims of affected injured workers. The employers will repay the cost of the insurance under favorable terms, according to a statement from the governor’s office.
“Transferring claims to insurance companies provides for the payment of benefits to injured workers; currently, the Board pays their claims and is engaged in legal proceedings to recoup those costs,” according to the statement. “The insurance does not relieve trust members of liability, but it does create a clear and lower-cost mechanism for employers to meet their obligations toward their injured and ill employees. Assumption of liability insurance also caps the cost of these claims for employers at a favorable price.”
The board was to have finalized the insurance policy purchase on behalf of the two largest defaulted group trusts, the Healthcare Industry Trust of New York and the Healthcare Providers Self Insurance Trust. “Additional proceeds can purchase insurance policies for group trusts that refused to meet their claim obligations and whose claims the Board now administers,” the statement explained. “The Business Relief Act of 2013 authorizes up to $900 million in bonding capacity.”
The bonds received the highest possible credit ratings from Moodys, Standard & Poor’s, and Fitch, according to the governor’s office. They are free of state and New York City taxes.