N.Y. Court Holds Up Assessments for Failed Workers’ Comp Trusts

The New York Workers’ Compensation Board must do a better job of justifying a significant assessment against employer groups in the state that self-insure for workers’ compensation claims, a Supreme Court judge in Albany has ruled.

That decision stems from an ongoing legal battle between the board – which oversees self-insurance pools – and 13 self-insured trusts that have sued the board for forcing them to pay $11 million to cover claims against other trusts that have defaulted.

The board maintains that nine trusts have defaulted and are insolvent in terms of their ability to pay claims. The board believes it is therefore authorized by state law to levy the assessments.

However, the 13 trusts counter that the board arbitrarily and wrongly assessed them, and that the board has failed to convincingly show the nine trusts have actually defaulted – an argument with which Acting Supreme Court Justice Kimberly O’Connor of the third Judicial District agreed.

O’Connor, in overturning several previous court rulings, found the board had overstepped its authority in levying the assessment and failed to adequately show that the nine defaulted trusts had in fact become insolvent.

However, O’Connor also upheld that the board was authorized by state law to make assessments on trusts, prompting board Chair Zachary Weiss to say he was “pleased the board has prevailed on the law and that this decision will allow us to collect the money needed to pay the claims of injured workers.”

The court has asked the board to supply additional information about its assessment process. Weiss pledged the board would go ahead and provide that information.

Added Weiss: “The bottom line is the board has the legal right to pay the claims of injured workers by assessing group self insured trusts and will conform to the court’s decision as we move ahead with this important responsibility.”

Topics New York Workers' Compensation