North Country employers are expected to save $16.2 million as a result of recent reforms implemented by the latest budget passing.
Governor Andrew M. Cuomo said changes to the state’s workers’ compensation and unemployment insurance systems that were included in the recently passed state budget will save employers across the state $1.2 million.
According to release issued by from the governor’s office, change to the workers’ compensation law will save North Country employers nearly $7 million and increase the minimum benefit to workers.
The state will create one method for collecting annual assessments from employers, thereby saving self-insured employers an estimated $500 million dollars. This change will eliminate an overly complicated and bureaucratic system that was not only expensive for the state but also for employers, the release said.
Cuomo said ending the “Fund for Reopened cases will save the North Country $3.2 million.
He said previous law allowed payments in certain old and re-opened claims to be made out of a special fund known as the “Fund for Reopened Cases.” The new budget closed this fund, eliminating the need for New York businesses to make payments into a fund that is unnecessary.
Cuomo said insurance reforms is expected to North Country employers an additional $6 million.
He said the changes also increasing competitiveness in the workers’ compensation insurance market. The governor said a series of measures to increase competitiveness in the workers’ compensation marketplace will help to drive down costs and provide relief to businesses.
Cuomo said the budget also offers a path to resolution for companies involved in the “Group Self Insurance Trust” crisis. The budget will provide relief for 10,000 businesses across New York State, who are currently saddled with an estimated $850 million in liabilities. The crisis resulted from deceptive business practices among several insurance entities that offered low-cost premiums to companies, yet failed to maintain adequate funds for workers’ comp benefits. When the fraud was discovered and it became clear the trusts were insolvent, thousands of New York’s businesses were socked with high and often unmanageable costs. The Governor’s reforms created a bonding program that will assist the self-insured employers resolve their liabilities.
Other changes include:
• Resolving Defaulted Group Trust Crisis: Providing a path to resolution for companies involved in the Group Self Insurance Trust crisis will provide relief for 10,000 businesses across New York State, who are currently saddled with an estimated $850 million in liabilities. The crisis resulted from deceptive business practices among several insurance entities that offered low-cost premiums to companies, yet failed to maintain adequate funds for workers’ comp benefits. When the fraud was discovered and it became clear the trusts were insolvent, thousands of New York’s businesses were socked with high and often unmanageable costs. The Governor’s reforms created a bonding program that will assist the self-insured employers resolve their liabilities.
• Increasing Benefits for Workers: The Governor’s reforms assist the state’s most vulnerable injured workers, increasing the minimum benefit from $100 to $150.
• In addition, this summer the Workers’ Compensation Board will begin accepting injury reports electronically from insurers using a national standard. This will cut paper-handling costs, greatly improve system oversight and guarantee benefits are paid timely to injured workers. As a result of the Governor’s reforms, New York is reforming the electronic filing process and leveraging technology to implement an aggressive agenda of structural change in the workers’ compensation system.
• Unemployment Insurance Reform: $400 Million in Savings to Employers while Increasing Benefit Rates for Claimants
The enacted reforms to the state’s Unemployment Insurance system include:
•·Significant interest payment savings for employers: As a result of the reforms, employers will be able to pay off their $3.5 billion debt to the federal government by 2016 – two years earlier than planned – reducing interest payments by $200 million.
• New measures to ensure trust fund solvency: Employers will have predictability like never before with a stabilized UI Trust Fund, decreasing the risk New York will have to borrow in the future to pay out claims.
• Strong anti-fraud measures: The reforms will improve New York’s nationally recognized UI fraud prevention measures. Beginning Oct. 1, 2013, a claimant who fraudulently collects benefits will be assessed a penalty. The reform will also increase fairness to businesses by not charging them for the future claims of employees who have been terminated for misconduct or voluntarily resigned.
• Help for unemployed to get back to work more quickly: As part of the reform, the Department of Labor will be issuing new work search regulations to help claimants find a job sooner. Those regulations will include the use of new electronic work search tools, establishing a weekly employer contact goal and maintaining supporting documentation for the claimant to track their progress.
• Increased minimum and maximum benefit rates for unemployed workers: Those who have become unemployed and are looking for work will see an increase in their maximum weekly rate from $405 to $420 beginning in October 2014 and additional increases will continue and be indexed to 50% of the state’s average weekly wage. The minimum weekly benefit rate will increase from $64 to $100. Rates were last increased in 1999.