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Just how workers compensation reforms proposed by New York Gov. Andrew Cuomo would affect self-insured employers remains uncertain, sources said.
Insurers praised the governor's 2013-2014 budget and legislative agenda released on Tuesday. It calls for increasing workers comp benefits as well as implementing system reforms.
The Des Plaines, Ill.-based Property Casualty Insurers Association of America and the Washington-based American Insurance Association endorsed the governor's proposals, which include reducing 14 annual state Workers Compensation Board assessments to just one.
The assessments that pay for operating New York's workers comp system and its various funds would be simplified by assessing employers on a pro-rata share of premiums, regardless of whether they self-insure or purchase insurance, according to the AIA.
But exactly how self-insured employers, which do not pay premiums, would be assessed remains to be determined, sources said.
The intent of the reforms may be good, but self-insured employers remain uncertain how they will be affected overall, said Steve Peroots, a member of the board of managers for the New York Self-Insurers Association and senior director for Marriott International Inc.'s claims services in Washington.
“Everybody is asking the same questions: Is this good or is this bad? And I think right now it's too early to tell,” Mr. Peroots said.
Meanwhile, a risk manager for a large, multistate manufacturer said that, in some instances, the proposed reforms would only shift the way claims expenses are paid and not produce savings.
For instance, the governor called for closing the state's Reopened Case Fund. That would eliminate assessments all employers now pay into the fund, the risk manager said. That means his company would have to pay the cost for its claims currently being paid by the Reopened Case Fund.
“They should probably never have been (paid by the Reopened Case Fund) in the first place,” he said. “But overall, they are not really saving anything. They are just changing the way they are being paid. It's just shifting it.”
But the governor's call to eliminate the state's Aggregate Trust Fund would benefit employers when it comes to negotiating with plaintiff attorneys, said the risk manager who asked not to be identified because he did not have corporate permission to speak.
Workers compensation reforms introduced by New York Gov. Andrew Cuomo include plans to help the state's employers by selling bonds to finance claims costs left by about 30 failed group self-insured trusts.