Bill Text: NY A00697 | 2017-2018 | General Assembly | Amended
Bill Title: Defines a public group self-insurer for the payment of compensation to employees of county self-insurance plans, boards of cooperative educational services and consortia by boards of cooperative educational services; makes related provisions.
Spectrum: Partisan Bill (Democrat 4-0)
Status: (Introduced - Dead) 2018-02-28 - print number 697b [A00697 Detail]
Download: New_York-2017-A00697-Amended.html
STATE OF NEW YORK ________________________________________________________________________ 697--B 2017-2018 Regular Sessions IN ASSEMBLY January 9, 2017 ___________ Introduced by M. of A. MAGNARELLI, SEPULVEDA -- read once and referred to the Committee on Labor -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee -- recommitted to the Committee on Labor in accordance with Assembly Rule 3, sec. 2 -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee AN ACT to amend the general municipal law, the workers' compensation law, the insurance law, the volunteer firefighters' benefit law, and the volunteer ambulance workers' benefit law, in relation to partic- ipation in a public group self-insurer The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Paragraph b of subdivision 2 of section 119-o of the gener- 2 al municipal law, as amended by chapter 681 of the laws of 1961, is 3 amended to read as follows: 4 b. The manner of employing, engaging, compensating, transferring or 5 discharging necessary personnel, subject, however, to the provisions of 6 the civil service law where applicable; the making of employer's 7 contributions for retirement, social security, health insurance, work- 8 men's compensation, volunteer firefighter and volunteer ambulance worker 9 benefits, including participation in a public group self-insurer, and 10 other similar benefits; the approval of attendances at conventions, 11 conferences and schools for public officials and the approval and 12 payment of travel and other expenses incurred in the performance of 13 official duties; the bonding of designated officers and employees; the 14 filing of oaths of office and resignations consistent with general laws 15 applicable thereto; provisions that for specific purposes designated 16 officers or employees of the joint service or a joint water, sewage or 17 drainage project shall be deemed those of a specified participating 18 corporation or district; and provisions that personnel assigned to a 19 joint service or a joint water, sewage or drainage project shall possess EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD00644-07-8A. 697--B 2 1 the same powers, duties, immunities and privileges they would ordinarily 2 possess (1) if they performed their duties only in the corporation or 3 district by which they are employed or (2) if they were employed by the 4 corporation or district in which they are required to perform their 5 duties. 6 § 2. Paragraph 1, subparagraphs (a), (b) and (h) of paragraph 2, 7 subparagraph (a) and item e of subparagraph (d) of paragraph 5 and 8 subparagraph (a) of paragraph 6 of subdivision 3-a of section 50 of the 9 workers' compensation law, paragraph 1, subparagraph (a) and item e of 10 subparagraph (d) of paragraph 5 and subparagraph (a) of paragraph 6 as 11 amended by chapter 139 of the laws of 2008, subparagraphs (a) and (h) of 12 paragraph 2 as amended by section 4 of part G of chapter 57 of the laws 13 of 2011, and subparagraph (b) of paragraph 2 as amended by section 1-a 14 of subpart E of part NNN of chapter 59 of the laws of 2017, are amended 15 to read as follows: 16 (1) Definitions. As used in this chapter the term "employers" shall 17 include: (a) employers with related activity in a given industry [which18shall include municipal corporations as that term is defined in sections19two and six-n of the general municipal law,] employing persons who 20 perform work in connection with the given industry, (b) an incorporated 21 or unincorporated association or associations consisting exclusively of 22 such employers provided they employ persons who perform such related 23 work in the given industry, and (c) a combination of employers as 24 described in subparagraph (a) hereof and an association or associations 25 of employers as described in subparagraph (b) hereof. 26 (a) Any group consisting exclusively of such employers may adopt a 27 plan for self-insurance, as a group, for the payment of compensation 28 under this chapter to their employees, except that no new groups may 29 adopt such a plan, and no group not composed solely of public entities 30 set forth in [paragraph a of] subdivision [four] three-f of this section 31 may insure any liabilities for any employers on and after January first, 32 two thousand twelve, except as provided for in paragraph ten of this 33 subdivision. Under such plan the group shall assume the liability of all 34 the employers within the group and pay all compensation for which the 35 said employers are liable under this chapter[, except that in the case36of municipal corporations as herein defined no proof of financial abili-37ty or deposit of securities or cash need be made in compliance with this38subdivision]. The group qualifying under this subdivision shall be known 39 as a group self-insurer and the employers participating therein and 40 covered thereby shall be known as members. 41 (b) Where such plan is adopted the group self-insurer, except a group 42 composed solely of public entities set forth in subdivision three-f of 43 this section, shall furnish satisfactory proof to the chair of its 44 financial ability to pay such compensation for the members in the indus- 45 try covered by it, its revenues, their source and assurance of contin- 46 uance. The chair shall require the deposit with the chair of such secu- 47 rities as may be deemed necessary of the kind prescribed in subdivisions 48 one, two, three, four and five, and subparagraph (a) of paragraph three 49 of subdivision seven of section two hundred thirty-five of the banking 50 law or the deposit of cash or the filing of irrevocable letters of cred- 51 it issued by a qualified banking institution as defined by rules promul- 52 gated by the chair or the filing of a bond of a surety company author- 53 ized to transact business in this state, in an amount to be determined 54 to secure its liability to pay the compensation of each employer as 55 above provided. Such surety bond must be approved as to form by the 56 chair. The chair shall require each group self-insurer to provide regu-A. 697--B 3 1 lar reports no less than annually, which shall include but not be limit- 2 ed to audited financial statements, actuarial opinions and payroll 3 information containing proof that it is fully funded. Such reports shall 4 also include a contribution year analysis detailing contributions and 5 expenses associated with each specific contribution year. For purposes 6 of this paragraph, proof that a group self-insurer is fully funded shall 7 at a minimum include proof of unrestricted cash and investments permit- 8 ted by regulation of the chair of at least one hundred percent of the 9 total liabilities, including the estimate presented in the actuarial 10 opinion submitted by the group self-insurer in accordance with this 11 chapter. The chair by regulation, may set further financial standards 12 for group self-insurers. Any group self-insurer that fails to show that 13 it is fully funded shall be deemed underfunded, and must submit a plan 14 for achieving fully funded status which may include a deficit assessment 15 on members of such group self-insurer which shall be subject to approval 16 or modification by the chair. The amount of such under-funding, as meas- 17 ured by the actuarial opinion or assumption of loss policy quotation 18 submitted by the group, shall be considered unfunded claims as set forth 19 in subdivision two of section sixteen hundred eighty-q of the public 20 authorities law as added by section 35 of Part GG of chapter 57 of the 21 laws of 2013. 22 [(h) Any member terminating membership in a group self-insurer after23less than four years in such group self-insurer, and any member in a24group self-insurer that has defaulted, shall be precluded from obtaining25prospective coverage from any group self-insurer for a period of at26least three years from the effective date of termination.] 27 (a) Each private group self-insurer shall, and each group self-insurer 28 may, secure the services of a group administrator to be responsible for 29 assisting the group self-insurer in complying with the provisions of 30 this section and the rules and regulations promulgated hereunder, and 31 for coordinating services including but not limited to claims process- 32 ing, loss control, legal, accounting and actuarial services. No person, 33 firm or corporation shall coordinate such services or otherwise carry 34 out the tasks of a group administrator as provided in this subdivision 35 or in the regulations issued pursuant thereto on behalf of a group self- 36 insurer unless such person shall have obtained from the chair a license 37 authorizing it to act as a group self-insurer administrator, which 38 license may be revoked for good cause. The chair shall promulgate regu- 39 lations setting forth any additional qualifications for such license, 40 governing the conduct and compensation of group self-insurer administra- 41 tors, and setting a license fee in an amount not less than five thousand 42 dollars per year for such license for each group self-insurer the admin- 43 istrator administers. Each administrator shall post a bond in the amount 44 of five hundred thousand dollars for each group self-insurer adminis- 45 tered or such other amount as may be set by the chair based on the cost 46 and availability of such bond, from which the chair may recover any 47 recoveries or penalties against the administrator under this section. 48 Nothing in this section shall relieve the trustees of a group self-in- 49 surer of any fiduciary obligation they hold to the other members of such 50 group self-insurer. 51 e. the number and amount of rate deviations provided to members during 52 the prior year and whether the recipient of any such deviation was a 53 trustee, provided that the application of rating factors in a manner 54 consistent with the filed rating plan is not a deviation which must be 55 reported under this subdivision; andA. 697--B 4 1 (a) Group self-insurers must file with the board, as soon as practica- 2 ble but no later than sixty days prior to the start of the fund year a 3 rating plan which is supported by an actuarial rate study prepared by an 4 independent, qualified actuary that is a fellow or associate of the 5 casualty actuarial society, that clearly identifies the actuary's indi- 6 cated rate assumptions therein. The rating plan must apply consistently 7 to all members, and must provide for a common renewal date for all 8 private group self-insurer members. The rates filed can be adjusted 9 based on an experience modification calculated for every member in 10 accordance with the experience rating plan promulgated by the workers' 11 compensation rating board. Experience modification formulas must be 12 applied identically to all members. Other rate deviations may be permis- 13 sible provided a plan has been approved by the board. Such deviations 14 shall not be in excess of ten percent of the actuary's indicated rate 15 unless otherwise approved by the board for a fully funded group self-in- 16 surer, and shall in no event result in amounts less than the actuary's 17 overall indicated rate. The chair by regulation may set further rate 18 plan and actuarial reporting standards. 19 § 3. Paragraph (g) of subdivision 3-e of section 50 of the workers' 20 compensation law, as added by chapter 729 of the laws of 1993, is 21 amended and a new subdivision 3-f is added to read as follows: 22 (g) The state insurance fund, any other insurer or any group self-in- 23 surer for municipal corporations as defined in subdivision [three-a] 24 three-f of this section may, at its option, offer a deductible in an 25 amount specified in paragraph (c) of this subdivision to any policyhold- 26 er who is not otherwise eligible for a deductible under this subdivi- 27 sion. 28 3-f. (1) Any group consisting exclusively of municipal corporations 29 and public corporations as such terms are defined in section sixty-six 30 of the general construction law, county self-insurance plans established 31 under article five of this chapter, boards of cooperative educational 32 services and consortia established by boards of cooperative educational 33 services may adopt a plan for self-insurance, as a group, for the 34 payment of compensation under this chapter to their employees. Such 35 group shall be known as a "public group self-insurer". All other groups 36 established under this section are "private group self-insurers". A 37 county self-insurance plan established under article five of this chap- 38 ter is not itself a public group self-insurer, and is not itself subject 39 to the requirements of this section, but may join a public group self- 40 insurer and, if it does so, shall assume all of the obligations of its 41 participants to the public group self-insurer. No entity which is not a 42 municipal corporation as defined in section sixty-six of the general 43 construction law, a county self-insurance plan established under article 44 five of this chapter, or a consortium established by a board of cooper- 45 ative educational services, may join a public group self-insurer unless 46 it may levy taxes or is otherwise directly capable of generating revenue 47 in the event of a funding deficiency within the public group self-insur- 48 er, or its obligations are guaranteed by another member which is such a 49 municipal corporation. A public group self-insurer shall comply with all 50 of the requirements of subdivision three-a of this section; including 51 any obligations imposed by such subdivision upon a group administrator, 52 but shall not be required to obtain a license authorizing it to act as a 53 group self-insurer administrator, to pay a license fee or to post a 54 bond. No proof of financial ability to pay the compensation provided for 55 by this chapter or deposit of securities shall be required of a public 56 group self-insurer and, in lieu thereof, the liability of the publicA. 697--B 5 1 group self-insurer's members shall serve as the security required under 2 paragraph two of subdivision three-a of this section. The chair shall 3 implement the provisions of this subdivision by promulgating rules and 4 regulations, but no such rules and regulations shall be necessary for 5 any provisions of this subdivision to be effective. 6 (2) A public group self-insurer as defined in paragraph one of this 7 subdivision may offer, as part of the agreement or by endorsement, 8 deductibles optional to the member for benefits payable under the agree- 9 ment, upon a determination by the chair that the plan is supported by an 10 actuarial analysis prepared by an independent, qualified actuary who is 11 a member of the casualty actuarial society that clearly identifies the 12 actuary's indicated deductible credit and rate assumptions, and subject 13 to underwriting by the public group self-insurer, consistent with the 14 following standards or factors: 15 (a) claimants' rights are properly protected and claimants' benefits 16 are paid without regard to any such deductible; 17 (b) appropriate premium reductions reflect the type and level of any 18 deductible approved by the chairman and selected by the member; 19 (c) premium reductions for deductibles are determined before applica- 20 tion of any experience modification, premium surcharge, or premium 21 discount; 22 (d) recognition is given to member characteristics, including size, 23 financial capabilities, nature of activities, and number of employees; 24 (e) if the member selects a deductible, the member is liable to the 25 public group self-insurer for the deductible amount in regard to bene- 26 fits paid for compensable claims; 27 (f) the public group self-insurer pays all of the deductible amount, 28 applicable to a compensable claim, to the person or provider entitled to 29 benefits and requires the member to pay to it in advance an amount actu- 30 arially determined to be sufficient to pay the portion of the compen- 31 sation claim that is within the deductible amount as those payments 32 become due; provided that such periodic payments shall be paid to the 33 public group self-insurer in intervals of no greater of six months; and 34 (g) failure to reimburse deductible amounts by the member to the 35 public group self-insurer is treated under the coverage agreement in the 36 same manner as nonpayment of contributions. 37 (3) Whenever the chair determines that a public group self-insurer has 38 become insolvent or that the compensation and benefits provided by this 39 chapter may be unpaid by reason of the default of a public group self- 40 insurer, the chair shall pay such compensation and benefits from admin- 41 istration expenses as provided in section one hundred fifty-one of this 42 chapter upon audit and warrant of the comptroller and upon vouchers 43 approved by the chair, which payments shall be considered expenses of 44 administration. As used in this paragraph, insolvent means the value of 45 the public group self-insurer's assets is less than the total costs of 46 the workers' compensation liabilities that it is anticipated the public 47 group self-insurer is required to pay within the succeeding six months. 48 Upon the insolvency of a public group self-insurer, each member shall 49 assume responsibility for the claims against it. The chair shall be 50 reimbursed for any payment made under this paragraph first by the public 51 group self-insurer itself and if the public group self-insurer is unable 52 to fully reimburse the chair for payments made by the chair then second 53 by the member of the public group self-insurer against which the claim 54 is asserted. If the chair is unable to obtain reimbursement from that 55 member, the chair make seek reimbursement from any other member of the 56 public group self-insurer. Any member which reimburses the chair forA. 697--B 6 1 payments made under this paragraph with respect to claims against any 2 other member may recover those payments from the member whose claims 3 were paid by the chair. Nothing herein shall preclude the chair from 4 directing that an underfunded public group self-insurer levy an assess- 5 ment on its members as part of a plan implemented pursuant to subpara- 6 graph (b) of paragraph two of subdivision three-a of this section. 7 § 4. The opening paragraph of section 3443 of the insurance law, as 8 added by chapter 924 of the laws of 1990, is amended to read as follows: 9 An insurer issuing a workers' compensation and employers' liability 10 insurance policy, [and a group self-insurer for municipal corporations11as defined in subdivision three-a of section fifty of the workers'12compensation law,] may offer, as part of the policy or by endorsement, 13 deductibles optional to the policyholder for benefits payable under the 14 policy, subject to approval by the superintendent and subject to under- 15 writing by the insurer, consistent with the following standards or 16 factors: 17 § 5. Subdivision 9 of section 30 of the volunteer firefighters' bene- 18 fit law, as amended by chapter 61 of the laws of 1989, is amended to 19 read as follows: 20 9. Insurance authorized to be purchased pursuant to subdivision eight 21 of this section may be secured from the state fund or any stock corpo- 22 ration, mutual corporation or reciprocal insurer authorized to transact 23 the business of workers' compensation in this state. If such insurance 24 is not secured, the political subdivision liable shall be deemed to have 25 elected to be a self-insurer unless it is a participant in a county plan 26 of self-insurance or its liability for benefits under this chapter is 27 covered by a town's participation in a county plan of self-insurance as 28 provided in subdivision three of section sixty-three of the workers' 29 compensation law, or is a participant in a group self-insurance plan 30 consisting solely of municipal corporations as provided in subdivision 31 three-f of section fifty of the workers' compensation law. Every such 32 self-insurer shall file with the chair of the workers' compensation 33 board a notice of such election prescribed in form by such chair. For 34 failure to file such notice within ten days after such election is made, 35 the treasurer or other fiscal officer of such political subdivision 36 shall be liable to pay to the chair of the workers' compensation board 37 the sum of one hundred dollars as a penalty, to be transferred to the 38 state treasury. A notice of election to be a self-insurer for compen- 39 sation and benefits to volunteer firefighters under the provisions of 40 the workers' compensation law and the general municipal law in effect 41 prior to March first, nineteen hundred fifty-seven, which was filed 42 prior to such date pursuant to the provisions of subdivision four of 43 section fifty of the workers' compensation law as in effect prior to 44 such date shall be deemed to be a notice of election filed under this 45 section unless the chair of the workers' compensation board is notified 46 to the contrary. The provisions of subdivision five of section fifty of 47 the workers' compensation law shall be applicable to such self-insurers. 48 § 6. Subdivision 8 of section 30 of the volunteer ambulance workers' 49 benefit law, as amended by chapter 61 of the laws of 1989, is amended to 50 read as follows: 51 8. Insurance authorized to be purchased pursuant to subdivision seven 52 of this section may be secured from the state fund or any stock corpo- 53 ration, mutual corporation, group self-insurers or reciprocal insurer 54 authorized to transact the business of workers' compensation in this 55 state. If such insurance is not secured, the political subdivision 56 liable shall be deemed to have elected to be a self-insurer unless it isA. 697--B 7 1 a participant in a county plan of self-insurance or its liability for 2 benefits under this chapter is covered by a town's participation in a 3 county plan of self-insurance as provided in subdivision nine of section 4 sixty-three of the workers' compensation law, or is a participant in a 5 group-insurance plan consisting solely of municipal corporations as 6 provided in subdivisions three-f of section fifty of the workers' 7 compensation law. Every such self-insurer shall file with the chair of 8 the workers' compensation board a notice of such election prescribed in 9 form by such chair. For failure to file such notice within ten days 10 after such election is made, the treasurer or other fiscal officer of 11 such political subdivision shall be liable to pay to the chair of the 12 workers' compensation board the sum of one hundred dollars as a penalty, 13 to be transferred to the state treasury. A notice of election to be a 14 self-insurer for compensation and benefits to volunteer ambulance work- 15 ers under the provisions of the workers' compensation law and the gener- 16 al municipal law in effect prior to March first, in the year of enact- 17 ment of this chapter, which was filed prior to such date pursuant to the 18 provisions of subdivision four of section fifty of the workers' compen- 19 sation law as in effect prior to such date shall be deemed to be a 20 notice of election filed under this section unless the chair of the 21 workers' compensation board is notified to the contrary. The provisions 22 of subdivision five of section fifty of the workers' compensation law 23 shall be applicable to such self-insurers. 24 § 7. This act shall take effect January 1, 2019; provided however, 25 that subdivision 3-f of section 50 of the workers' compensation law, as 26 added by section three of this act, shall take effect immediately.
