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New York’s highest court rules in favor of amendment that dissolved comp fund

New York’s highest court rules in favor of amendment that dissolved comp fund

The New York Court of Appeals on Tuesday found constitutional a 2013 amendment to the state’s workers compensation law closing the statewide fund for cases that are reopened, ruling against 20 insurers that long held that the amendment created a collective of unfunded liabilities between $1.1 billion and $1.6 billion.

The insurance carriers filed their original lawsuit in July 2013, claiming that the amendment — known as The Business Relief Act — served no legitimate purpose and would result in an enormous financial burden on private insurers, self-insured companies and a nonprofit carrier for state employees. 

The state created its Fund for Reopened Cases in 1933 to help employers and insurers pay for workers compensation claims that are reopened after a minimum of seven years following the injury and a minimum of three years following since the last payment. The fund, which was paid for with special fees collected from business owners by their insurance carrier, was closed per the amendment because costs increased dramatically. 

“Plaintiffs noted in their (2013) complaint that there had been ‘a surge in reopened cases in recent years.’ Defendants assert that the annual assessment required to maintain the fund was approximately $95 million in 2006, but that number had increased to over $300 million by the end of 2012,” according to court documents.




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