NY State Senate Bill 2015-S1760

Senate Bill S1760

2015-2016 Legislative Session

Removes the mandatory aggregate trust fund deposit requirements for non-scheduled permanent partial disability cases

download bill text pdf

Archive: Last Bill Status - In Senate Committee Labor Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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Actions

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 06, 2016	referred to labor
Jan 14, 2015	referred to labor

2015-S1760 (ACTIVE) - Details

Current Committee:: Senate Labor
Law Section:: Workers' Compensation Law
Laws Affected:: Amd §27, Work Comp L
Versions Introduced in Other Legislative Sessions:: 2011-2012: S7468
2013-2014: S4587

2015-S1760 (ACTIVE) - Summary

Removes the mandatory aggregate trust fund deposit requirements for non-scheduled permanent partial disability cases.

2015-S1760 (ACTIVE) - Sponsor Memo

                                BILL NUMBER:S1760

TITLE OF BILL:  An act to amend the workers' compensation law, in
relation to removing the mandatory aggregate trust fund deposit
requirements for non-scheduled permanent partial disability cases

PURPOSE:  Remove mandatory aggregate trust fund deposit requirements
in non-scheduled permanent partial disability cases.

SUMMARY OF PROVISIONS:

Section 1: Removes language from Section 27 of the Workers
Compensation Law that makes it mandatory for carriers to deposit the
present value of a non-scheduled permanent partial disability claim
into the aggregate trust fund.

Section 2: Provides an effective date.

EXISTING LAW:  Current law mandates a deposit into the aggregate trust
fund in non-scheduled permanent partial disability cases. This bill
would remove that requirement. Instead, the Workers' Compensation
Board would have the discretion to require a deposit in certain cases,
as was the case before the 2007 reform.

JUSTIFICATION:  The 2007 Workers Compensation Reform was intended to
increase benefits for workers while providing immediate and long-term

savings to businesses in New York State. While it was successful in
providing immediate savings, the long-term savings have not been
realized.  Businesses across New York Stale are seeing their rates
climb at an alarming rate, In fact, the loss-cost level change has
gone from a decrease of 6.4 percent in 2008, to an increase of 4.5,
7.7, and 9.1 percent for the policy years of 2009, 2010, and 2011,
respectively.

The requirement for carriers to make a deposit into the aggregate
trust fund for the present value of a claim in non-scheduled permanent
partial disability cases is a significant cost driver in Workers
Compensation. Requiring upfront payment of a claim (that could extend
up to ten years and cost in the hundreds of thousands of dollars)
places tremendous financial burdens on carriers. These burdens are
passed on to employers, especially in the event an employer
participates in a high deductible plan.

Also, requiring a deposit of the present value of a non-scheduled
claim is a difficult and uncertain process. The amount of such claims
can change significantly over the life of the claim depending on the
wage-earning capacity of the claimant. Under current law, the carrier
is not entitled to any refund in the event the actual value of the
claim is less than the amount of the deposit.

The huge immediate cost imposed by requiring the deposit in
non-scheduled cases also has the effect increasing the amount paid out
as a result of the settlement process outlined in Section 32 of the
Workers Compensation Law. This is also a cost that ultimately is
passed on to employers.


Finally, due to the fact that the State Insurance Fund is exempt from
these deposit requirements, the Fund is able to maintain an unfair
competitive advantage over private carriers. This bill would remove
the ATF deposit requirement and reduce costs to carriers and employers
without affecting the amount of a claimant's benefit under section 15
of the Workers Compensation Law. Carriers would still be liable to pay
the full amount of the claim as required under law.

LEGISLATIVE HISTORY:  S.4587/A.1569 of 2013-14; S.7468/A.9386 of 2012

FISCAL IMPLICATIONS:  This bill could result to significant savings to
workers compensation carriers and employers throughout New York State

EFFECTIVE DATE:  This act shall take effect on January 1 next
succeeding the date it shall have become law and shall apply to any
award made on or after such date.

2015-S1760 (ACTIVE) - Bill Text download pdf

                            
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  1760

                       2015-2016 Regular Sessions

                            I N  S E N A T E

                            January 14, 2015
                               ___________

Introduced  by  Sen.  SEWARD -- read twice and ordered printed, and when
  printed to be committed to the Committee on Labor

AN ACT to amend the workers' compensation law, in relation  to  removing
  the  mandatory aggregate trust fund deposit requirements for non-sche-
  duled permanent partial disability cases

  THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section  1.  Subdivision  2 of section 27 of the workers' compensation
law, as amended by chapter 6 of the laws of 2007, is amended to read  as
follows:
  2.  If  an award under this chapter requires payment of death benefits
or other compensation by an insurance carrier or employer in  periodical
payments,  the  board may, in its discretion, at any time, any provision
of this chapter to the contrary notwithstanding, compute and  permit  or
require  to be paid into the aggregate trust fund an amount equal to the
present value of all unpaid death  benefits  or  other  compensation  in
cases  in which awards are made for total permanent or permanent partial
disability for a period of one hundred and four weeks or more, for which
liability exists, together with such additional sum  as  the  board  may
deem  necessary for a proportionate payment of expenses of administering
the fund so created, including the cost of the actuarial computation  by
or on behalf of the board of the present value of the award, and for the
purposes of this section such cases shall be known as discretionary type
cases.  If  any such award made on or after July first, nineteen hundred
thirty-five, requires payment for total permanent  disability  resulting
from  the  loss of both hands, or both arms, or both feet, or both legs,
or both eyes, or of any two thereof, or for permanent partial disability
resulting from loss of an arm, leg, hand, foot or eye, or of death bene-
fits by an insurance carrier which is  a  stock  corporation  or  mutual
association,  [or  if  any  such  award made on or after July first, two
thousand seven requires payment for permanent partial  disability  under

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD02663-01-5

S. 1760                             2

paragraph  w  of subdivision three of section fifteen of this article by
an insurance carrier which is a  stock  corporation  or  mutual  associ-
ation,]  which for the purposes of this section shall be known as manda-
tory  type  cases, the board shall immediately compute the present value
thereof and require payment of such  amount  into  the  aggregate  trust
fund,  together with such additional sum as the board may deem necessary
for a proportionate payment of expenses of administering such trust fund
including the cost of the actuarial computation by or on behalf  of  the
board of the present value of the award provided, however, that where an
employer  or his insurance carrier is found to be entitled to reimburse-
ment from the special disability fund of subdivision  eight  of  section
fifteen  OF  THIS  ARTICLE,  the computation of the present value of the
award and the requirement for payment of such amount into the said trust
fund shall not be mandatory and such cases shall be deemed to be discre-
tionary type cases; further provided that where an employee entitled  to
compensation  under  this chapter be injured or killed by the negligence
or wrong of another not in the same employ, the computation of the pres-
ent value and the requirement for payment of such amount into  the  said
trust  fund  shall be held in abeyance until (1) six months have elapsed
from the award of compensation, or in any event not more than  one  year
after  the  date of the accident, if the injured employee, or in case of
death, his personal representatives, spouse, parents, dependents or next
of kin, or anyone otherwise entitled to recover damages at common law or
otherwise, on account of such injury or death, have failed  to  commence
such  action,  (2)  the  termination  of  any such action brought by the
injured employee, or in case of  death,  his  personal  representatives,
spouse, parents, dependents or next of kin, or anyone otherwise entitled
to recover damages, at common law or otherwise, on account of such inju-
ry  or  death, under the provisions of section twenty-nine of this arti-
cle.
  S 2. This act shall take effect on the first of January next  succeed-
ing  the date on which it shall have become a law and shall apply to any
award made on or after such date.

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