Bill S7896-2013

Relates to provisions permitting certain groups to self insure

Enacts additional provisions permitting self insurance by certain groups.

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  • Jun 17, 2014: REFERRED TO RULES

Memo

BILL NUMBER:S7896                Revised Memo 6/17/2014

TITLE OF BILL:

An act to amend the workers' compensation law, in relation to group self insurers; and providing for the repeal of such provisions upon expiration thereof

PURPOSE:

To relieve rate pressure on a fund where there is sufficient alternate security to provide for payment of liabilities

SUMMARY OF PROVISIONS:

Adds a new subparagraph (c) to section 50 subdivision 3-a paragraph (10) of the Workers Compensation Law to allow the Comp Board to reduce reserve requirements by as much as 20% if it finds other satisfactory means for a group self-insurer plan to secure claims. The other means include a demonstration of the following:

(1) the existence of a collective bargaining agreement which requires that employers obtain workers compensation coverage from the group;

(2) the group has the ability to set, revise, or re-set rates on at least a monthly schedule as may be necessary to provide for collection of additional funds from group members in the event the deposit with the board is insufficient to meet the liabilities of the group;

(3) the group has established a Delinquency Fund or has agreements with a fund that will be liable for any uncollected delinquent contributions to the group;

(4) the group members have assumed joint and several obligation for their period of membership for any liabilities of all claims of the fund;

(5) there is a direct or indirect penalty or withdrawal liability for any member who withdraws from the plan;

(6) the plan is approved by the federal department of labor as an Employee Retirement Income Security Act (ERISA) fund.

Upon a finding by the Chair of the Workers Compensation Board that the group fails to meet the requirements set forth in this clause, approval shall be withdrawn, with written notice stating the reasons therefor.

EXISTING LAW:

New bill.

JUSTIFICATION:

The result of reform can be a loss of flexibility. This is what happened in the area of regulation of self-insured funds. The reforms to assure needed reserves to secure liabilities were necessary. However, they also had the effect of removing some of the flexibility under which a selfinsured fund would be able to show sufficient alternate security. This bill provides such flexibility.

FISCAL IMPLICATIONS:

None to the state.

EFFECTIVE DATE:

This act shall take effect immediately and shall expire and be deemed repealed on June 30, 2017.


Text

STATE OF NEW YORK ________________________________________________________________________ 7896 IN SENATE June 17, 2014 ___________
Introduced by Sen. GOLDEN -- read twice and ordered printed, and when printed to be committed to the Committee on Rules AN ACT to amend the workers' compensation law, in relation to group self insurers; and providing for the repeal of such provisions upon expira- tion thereof THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Paragraph 10 of subdivision 3-a of section 50 of the work- ers' compensation law is amended by adding a new subparagraph (c) to read as follows: (C) ANY OTHER PROVISION OF THIS PARAGRAPH TO THE CONTRARY NOTWITH- STANDING, A GROUP SELF INSURER PLAN THAT IN ADDITION TO MEETING OTHER REQUIREMENTS OF THIS PARAGRAPH, DEMONSTRATES ITS ABILITY TO SECURE ANTICIPATED PRESENT AND FUTURE CLAIMS OF THE MEMBERS OF THE GROUP SHALL, UPON APPROVAL BY THE BOARD, BE PERMITTED TO MAINTAIN RESERVES OF NOT LESS THAN EIGHTY PERCENT OF THE AMOUNTS THAT WOULD OTHERWISE BE REQUIRED PURSUANT TO CLAUSE TWO OF SUBPARAGRAPH (A) OF THIS PARAGRAPH. THE BOARD SHALL APPROVE SUCH GROUP SELF-INSURER PLAN THAT DEMONSTRATES THE FOLLOW- ING: (1) THE EXISTENCE OF A COLLECTIVE BARGAINING AGREEMENT WHICH REQUIRES THAT EMPLOYERS OBTAIN WORKERS' COMPENSATION COVERAGE FROM THE GROUP; (2) THE GROUP HAS THE ABILITY TO SET, REVISE, OR RE-SET RATES ON AT LEAST A MONTHLY SCHEDULE AS MAY BE NECESSARY TO PROVIDE FOR COLLECTION OF ADDITIONAL FUNDS FROM GROUP MEMBERS IN THE EVENT THE DEPOSIT WITH THE BOARD IS INSUFFICIENT TO MEET THE LIABILITIES OF THE GROUP; (3) THE GROUP HAS ESTABLISHED A DELINQUENCY FUND OR HAS AGREEMENTS WITH A FUND THAT WILL BE LIABLE FOR ANY UNCOLLECTED DELINQUENT CONTRIB- UTIONS TO THE GROUP; (4) THE GROUP MEMBERS HAVE ASSUMED JOINT AND SEVERAL OBLIGATION FOR THEIR PERIOD OF MEMBERSHIP FOR ANY LIABILITIES OF ALL CLAIMS OF THE FUND; (5) THERE IS A DIRECT OR INDIRECT PENALTY OR WITHDRAWAL LIABILITY FOR ANY MEMBER WHO WITHDRAWS FROM THE PLAN; AND
(6) THE PLAN IS APPROVED BY THE FEDERAL DEPARTMENT OF LABOR AS AN EMPLOYEE RETIREMENT INCOME SECURITY ACT (ERISA) FUND. UPON FINDING BY THE CHAIR OF THE BOARD THAT THE GROUP FAILS TO MEET THE REQUIREMENTS SET FORTH IN THIS SUBPARAGRAPH, APPROVAL SHALL BE WITH- DRAWN, WITH WRITTEN NOTICE STATING THE REASONS THEREFOR. S 2. This act shall take effect immediately and shall expire and be deemed repealed on and after June 30, 2017.

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