A new 2013-14 state budget change adversely affects the insurance costs of all employers which obtain worker's compensation coverage from the state insurance fund. See the details below:
The proposed 2013-14 budget of New York State provides that “the assessment reserves held by the state insurance fund for the payment of future assessments are no longer required and all funds and investments held by the state insurance fund shall be transferred to the chair of the workers’ compensation board as soon as practicable."
The budget seeks to combine the various separate standard premium assessments here to for used to fund various aspects of the workers’ compensation programs of the state including:
3.1% WCB expenses
9.6% Special Disability fund
4.9% Re-opened case fund
0.3% Special Funds conservation committee
0.9% Interdepartmental expenses
18.8% Total assessment charges (as of 10/1/2012)
The state insurance fund, due to the sizeable assessment reserves it has built up over many years, has not been collecting assessments applicable to the Special Disability fund. Private carriers, subject to the regulation of the NYS Insurance Department, have been required to charge their customers the entire 18.8% assessment. Consequently, customers of the state insurance fund, many of which are small businesses, have benefited from a reduced assessment of 9.6%.
By combining the assessments and requiring all payers, including the state insurance fund, to collect the full assessment, customers of the state insurance fund will bear a 10.4% increase in their cost of workers’ compensation coverage if the budget is enacted as proposed.
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