N.Y. Workers' Compensation Law § 151: Assessments for annual expenses

§ 151. Assessments for annual expenses. 1. The annual expenses

necessary for the board to administer the provisions of this chapter,

the volunteer ambulance workers' benefit law, the volunteer

firefighters' benefit law, the disability benefits law, and the

workmen's compensation act for civil defense volunteers shall be borne

by affected employers securing compensation for their employees pursuant

to section fifty of this chapter. The board shall collect such annual

expenses from affected employers through assessments as provided by the

provisions of this section, including for purposes of this subdivision:

(a) the aggregate assessment amount described in subparagraph four of

paragraph (h) of subdivision eight of section fifteen of this chapter

for the special disability fund in accordance with each financing

agreement described in such subparagraph, (b) the aggregate assessment

amount described in section fifty-c of this chapter for the self-insurer

offset fund in accordance with each financing agreement described in

such section, (c) the assessment amount described in subdivision three

of section twenty-five-a of this chapter for the fund for reopened

cases, (d) the assessment amount described in section two hundred

fourteen of this chapter for the special fund for disability benefits

and (e) a sum sufficient as determined by the chair but no greater than

0.4% of the total estimated statewide premium to cover the establishment

and maintenance of dedicated workers' compensation fraud units within

New York state district attorneys' offices; provided, that the foregoing

and any other provision of this chapter to the contrary notwithstanding,

assessment receipts shall be applied first to fully fund the amount

described in subparagraph four of paragraph (h) of subdivision eight of

section fifteen of this chapter and then to fully fund the amount

described in section fifty-c of this chapter in accordance with each

then applicable financing agreement pursuant to such provisions prior to

application to any other purpose other than to pay any actual costs of

collecting such assessment that are not otherwise funded. For purposes

of this section, affected employer means all employers required to

obtain workers' compensation coverage pursuant to this chapter.

2. On the first day of November, two thousand thirteen, and annually

thereafter, the chair shall establish an assessment rate for all

affected employers in the state of New York in an amount expected to be

sufficient to produce assessment receipts at least sufficient to fund

all estimated annual expenses pursuant to subdivision one of this

section except those expenses for which an assessment is authorized for

self-insurance pursuant to subdivision five of section fifty of this

chapter. Such rate shall be assessed effective the first of January of

the succeeding year and shall be based upon a single methodology

determined by the chair. The chair may also establish an additional

assessment rate, not to exceed thirty percent of annual premiums, for

those affected employers who are in default in the payment of their

compensation pursuant to subparagraph (b) of paragraph seven of

subdivision three-a of section 50 of this chapter. Such additional

assessment shall be collected and remitted to the chair consistent with

subdivisions four and five of this section. The chair shall make

available for public inspection an itemized statement of the estimated

annual expenses in the office of the board for thirty days immediately

after the rate is established.

3. The chair and department of audit and control annually as soon as

practicable after the first of April of each year shall ascertain the

actual total amount of expenses, including in addition to the direct

costs of personal service, the cost of maintenance and operation, the

cost of retirement contributions made and workers' compensation premiums

paid by the state for or on account of personnel, rentals for space

occupied in state owned or state leased buildings, such additional sum

as may be certified to the chair and the department of audit and control

as a reasonable compensation for services rendered by the department of

law and expenses incurred by such department, for transfer into the

training and educational program on occupational safety and health fund

created pursuant to chapter eight hundred eighty-six of the laws of

nineteen hundred eighty-five and section ninety-seven-c of the state

finance law, for the New York state occupational health clinics network,

for the department of labor occupational safety and health program and

for transfer into the uninsured employers' fund pursuant to subdivision

two of section twenty-six-a of this chapter, and all other direct or

indirect costs, incurred by the board in connection with the

administration of this chapter, except those expenses for which an

assessment is authorized for self-insurance pursuant to subdivision five

of section fifty of this chapter. Assessments pursuant to subparagraph

four of paragraph (h) of subdivision eight of section fifteen of this

chapter for the special disability fund, pursuant to section fifty-c of

this chapter for the self insurer offset fund, pursuant to subdivision

three of section twenty-five-a of this chapter for the fund for reopened

cases, and pursuant to section two hundred fourteen of this chapter for

the special fund for disability benefits shall be included in the total

amount of expenses for the purposes of this subdivision. Any overpayment

of annual assessments resulting from the requirements of this

subdivision shall be applied as a credit against the future assessment

rate provided the fund balance shall not be reduced below five percent

of the total amount assessed.

4. For those affected employers obtaining coverage:

(a) by insuring with the state fund pursuant to subdivision one of

section fifty of this chapter; or (b) through a policy pursuant to

subdivision two of section fifty of this chapter; or (c) through a

county self-insurance plan under article five of this chapter; or (d)

through a group private or public self-insurer pursuant to subdivision

three-a of section fifty of this chapter, such assessment amounts shall

be collected and remitted to the chair by the carrier or the state

insurance fund, or county plan, or group private or public self-insurer,

on behalf of the employer(s) until such time as the board establishes a

direct employer payment process. Affected private or public employers

providing compensation through self insurance pursuant to subdivision

three of section fifty of this chapter shall pay assessment amounts

directly to the chair.

5. Insurance carriers as defined in section two of this chapter

including the state insurance fund and self-insurers, shall collect from

affected employers and periodically remit to the board such assessments

and shall be responsible for ensuring their employers/policyholders are

current on their assessments. (a) Failure to ensure policyholders or

employers are current on their assessments will result in the insurance

carrier; or self-insurer; being liable for such assessments.

(b) In the event the employer; insurance carrier; or self-insurer;

knew or should have known that the employer misreported any data related

to the assessment process, they may be subject to any applicable

penalties or sanctions provided by this chapter.

6. (a) Effective the first day of January, two thousand fourteen, all

assessment cycles in progress will be replaced with the assessment rate

determined herein. However, such new assessment rate shall not relieve

any carrier or self-insurer for outstanding amounts due as of the first

day of January two thousand fourteen.

(b) All assessment amounts collected by insurance carriers, except the

state fund, and not yet remitted to the board prior to the first day of

January, two thousand fourteen must be remitted to the chair no later

than the first day of February, two thousand fourteen.

(c) Effective immediately, notwithstanding any law to the contrary,

pursuant to the provisions of this chapter, the assessment reserves

remitted to the chair pursuant to this paragraph shall, at the request

of the director of the budget, be distributed as follows:

(i) As soon as practicable on or after April first, two thousand

sixteen, the chair of the workers' compensation board shall transfer one

hundred forty million dollars to the state insurance fund, for partial

payment and partial satisfaction of the state's obligations to the state

insurance fund under workers' compensation law section eighty-eight-c

for two thousand sixteen.

(ii) Effective immediately, the chair of the workers' compensation

board shall authorize the board to expend up to sixty million dollars to

implement infrastructure and system upgrades consistent with

recommendations of the workers' compensation board redesign and

reengineering project.

(iii) Effective immediately, the chair of the workers' compensation

board shall authorize the board to expend up to forty million dollars

for: (A) transfer into the training and educational program on

occupational safety and health fund created pursuant to chapter eight

hundred eighty-six of the laws of nineteen hundred eighty-five and

section ninety-seven-c of the state finance law; (B) the department of

labor occupational safety and health program; (C) transfer into the

uninsured employers' fund pursuant to subdivision two of section

twenty-six-a of this chapter in connection with payment of claims made

pursuant to article eight-A of this chapter; (D) a reduction in

liabilities of the special disability fund pursuant to subdivision eight

of section fifteen of this chapter and/or the fund for reopened cases

pursuant to section twenty-five-a of this chapter; and/or (E) transfer

to or payment of up to ten million dollars of such amount on behalf of

the superintendent of financial services for costs associated with the

implementation of the paid family leave act of article nine of this

chapter.

Any and all funds remaining after accounting for the transfers and

expenditures set forth above may, at the discretion of the director of

the budget, either remain with the workers' compensation board or be

transferred to the general fund for the purpose of reducing budget gaps.

Annually, the workers' compensation board will provide to the director

of the budget, the chair of the senate finance committee, and the chair

of the assembly ways and means committee, an accounting of such funds

and all associated income received. Such accounting will continue until

March thirty-first, two thousand twenty.

7. Assessments for the expenses of the board including assessments

pursuant to paragraph (h) of subdivision eight of section fifteen of

this chapter for the special disability fund and pursuant to subdivision

three of section twenty-five-a of this chapter for the fund for reopened

cases shall not constitute elements of loss.

7-a. Notwithstanding any law to the contrary, when there is a default

on the payment of premium, including any assessments payable under

subdivision seven of this section, any action by the carrier, including

the state insurance fund, to collect any unpaid premium shall include an

action seeking recovery of such assessments on behalf of the board. The

carrier shall remit the amount of any such unpaid assessments collected

either pursuant to a judgment or by settlement to the board.

8. The foregoing and every other prevision of law to the contrary

notwithstanding, all moneys received on account of the assessment

authorized by this section shall be deposited upon receipt into the

administrative clearing account held by the commissioner of taxation and

finance and applied, as pledged assessments for purposes of sections

sixteen hundred eighty-l and sixteen hundred eighty-q of the public

authorities law and prior to any other application: first, in accordance

with any other provision of any special disability fund financing

agreement entered into prior to March thirty-first, two thousand

thirteen, to the extent required to fully fund the then current payment

and reserve requirements under such financing agreement; and second, in

accordance with each special disability fund financing agreement and

each self-insured bond financing agreement, to the extent required to

fully fund the then current payment and reserve requirements under each

such financing agreement entered into after March thirty-first, two

thousand thirteen with respect to bonds issued by the dormitory

authority pursuant to either section sixteen hundred eighty-l or section

sixteen hundred eighty-q of the public authorities law, on a pari passu

basis without preference or priority among all such other bonds. Such

monies shall not be commingled with any other monies in the

commissioner's custody prior to the completion of such application and

shall not be deemed to be part of the state treasury or of any funds

under management of the state. This section shall not be deemed to

authorize any infringement upon the rights of holders of such bonds

issued or to be issued under such sections of the public authorities

law. The provisions of this section may be included by the dormitory

authority in any contract with the holders of any such bonds. The

operation of this section and the application of the receipts of the

assessment authorized by this section shall be subject to the provisions

of each financing agreement authorized pursuant to subparagraph four of

paragraph (h) of subdivision eight of section fifteen or to section

fifty-c of this chapter and this section shall not be deemed to

authorize any infringement upon the rights of holders of bonds issued or

to be issued pursuant to either such provision.

9. The provisions of this section shall not apply with respect to

policies containing coverage pursuant to paragraph one of subsection (j)

of section three thousand four hundred twenty of the insurance law

relating to every policy providing comprehensive personal liability

insurance on a one, two, three or four family owner-occupied dwelling.

10. If the assessments collected pursuant to this section are

insufficient to meet the obligations financed by the assessments, the

chair, for a period of three years, may borrow any shortfall from the

state insurance fund with any borrowing to be added to the assessments

under this section and repaid the following year to the state insurance

fund with interest at the state insurance fund's then current rate of

return.

11. Effective immediately, notwithstanding any law to the contrary,

pursuant to the provisions of this chapter, 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 related to the assessment reserves shall be transferred

to the chair of the workers' compensation board as soon as practicable.

The commissioner of taxation and finance shall be custodian of such

funds, which shall not be commingled with other funds of the workers'

compensation board, and may invest such funds in the same manner as

surplus funds held by the state insurance fund pursuant to subdivision

two of section eighty-seven of this chapter. Disbursements of such funds

shall be made by such commissioner upon written warrant of the chair of

the workers' compensation board or the chair's designee.

At the request of the director of the budget, such moneys transferred

to the chair of the workers' compensation board shall be distributed as

follows:

(a) As soon as practicable after April first, two thousand thirteen,

the chair of the workers' compensation board shall transfer two hundred

fifty million dollars to the general fund for debt management or fiscal

uncertainties.

(b) As soon as practicable after April first, two thousand fourteen,

the chair of the workers' compensation board shall transfer one billion

dollars to the general fund for the purpose of reducing budget gaps.

(c) As soon as practicable after April first, two thousand fifteen,

the chair of the workers' compensation board shall transfer two hundred

fifty million dollars to the general fund for the purpose of reducing

budget gaps.

(d) As soon as practicable after April first, two thousand sixteen,

the chair of the workers' compensation board shall transfer two hundred

fifty million dollars to the general fund for the purpose of reducing

budget gaps.

(e) Any and all funds remaining after accounting for the transfers set

forth above may, at the discretion of the director of the budget, either

remain with the workers' compensation board or be transferred to the

general fund for the purpose of reducing budget gaps or to the state

insurance fund. The budget director, acting in consultation with the

chair of the workers' compensation board, shall determine whether any

money returned to the state insurance fund is a loan or a transfer and

the terms and conditions therein. Any funds transferred or loaned to the

state insurance fund upon the budget director's request may be invested

in a manner consistent with investment guidelines pursuant to

subdivision two of section eighty-seven of the workers' compensation

law.

Annually, the state insurance fund and the workers' compensation board

will provide to the director of the budget, the chair of the senate

finance committee, and the chair of the assembly ways and means

committee, an accounting of such funds and all associated income

received. Such accounting will continue until March thirty-first, two

thousand seventeen.

12. The chair shall promulgate regulations to carry out the provisions

of this section.

13. To effectuate an efficient assessment process and the proper

management of the workers' compensation system all data in possession of

the compensation insurance rating board shall be made available to the

board and the department of financial services upon request.

14. The chair may conduct periodic audits of any employer,

self-insurer, insurance carrier and the state insurance fund concerning

any information or payment required under this section, including any

information relevant to the payment or calculation of any assessments.

The employer, self-insurer, insurance carrier and the state insurance

fund shall provide all necessary documents and information in relation

to an audit in a manner prescribed by the chair. Upon the determination

of the chair that an employer, self-insurer, insurance carrier or the

state insurance fund has underpaid an assessment as a result of its

inaccurate reporting, the employer, self-insurer, insurance carrier or

the state insurance fund upon notice from the chair, shall pay the full

amount of the underpaid assessment, along with interest at the rate of

nine per cent per annum on the unpaid assessment due not later than

thirty days after such notice. An insurance carrier or employer that

knowingly makes a material misrepresentation of information required for

the purpose of effectuating this section shall be guilty of a class E

felony.

15. Beginning in two thousand twenty-eight, the board shall include in

its annual report made pursuant to section one hundred fifty-three of

this article a summary of the funds distributed for the purpose of

establishment and maintenance of dedicated workers' compensation fraud

units within New York state district attorneys' offices pursuant to

paragraph (e) of subdivision one of this section, which shall include

for each district attorneys' office:

(a) the amount of funds distributed;

(b) a description of each resulting conviction, including:

(i) the full name of the defendant;

(ii) the date of conviction;

(iii) a description of the offense;

(iv) the amount of money alleged to have been defrauded; and

(v) a description of any offenses other than workers' compensation

fraud for which the defendant was simultaneously convicted;

(c) the total number of and pertinent details contained in any

charging instruments, which shall include only the amount of money

alleged to have been defrauded and the workers' compensation fraud

charges alleged, and shall not include any personally identifying

information of the charged individual or any other information that is

not publicly available; and

(d) the number of new positions created and persons hired for

positions within dedicated workers' compensation fraud units.