Bill Text: NY S06410 | 2023-2024 | General Assembly | Amended

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Bill Title: Authorizes certain groups to adopt a plan for self-insurance as a group to be known as a public group self-insurer; establishes procedures for insolvency of a public group self-insurer and for offering deductibles.

Spectrum: Slight Partisan Bill (Democrat 2-1)

Status: (Passed) 2023-09-15 - SIGNED CHAP.448 [S06410 Detail]

Download: New_York-2023-S06410-Amended.html

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                STATE OF NEW YORK
        ________________________________________________________________________

                                         6410--A
            Cal. No. 1064

                               2023-2024 Regular Sessions

                    IN SENATE

                                     April 18, 2023
                                       ___________

        Introduced  by  Sens.  RAMOS,  GRIFFO, SKOUFIS -- read twice and ordered
          printed, and when printed to be committed to the Committee  on  Insur-
          ance  --  reported  favorably from said committee and committed to the
          Committee on Labor -- reported favorably from said committee,  ordered
          to  first  and  second  report,  ordered to a third reading, passed by
          Senate and delivered to the  Assembly,  recalled,  vote  reconsidered,
          restored  to  third  reading, amended and ordered reprinted, retaining
          its place in the order of third reading

        AN ACT to amend the insurance law, the workers'  compensation  law,  the
          volunteer  firefighters' benefit law, the volunteer ambulance workers'
          benefit law, and the general municipal law, in relation to deductibles
          offered by public group self-insurers

          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:

     1    Section 1. The opening paragraph of section 3443 of the insurance law,
     2  as  added  by  chapter  924  of  the laws of 1990, is amended to read as
     3  follows:
     4    An insurer issuing a workers' compensation  and  employers'  liability
     5  insurance  policy,  [and a group self-insurer for municipal corporations
     6  as defined in subdivision three-a  of  section  fifty  of  the  workers'
     7  compensation  law,]  may offer, as part of the policy or by endorsement,
     8  deductibles optional to the policyholder for benefits payable under  the
     9  policy,  subject to approval by the superintendent and subject to under-
    10  writing by the insurer,  consistent  with  the  following  standards  or
    11  factors:
    12    §  2. Subparagraph (a) of paragraph 2 of subdivision 3-a of section 50
    13  of the workers' compensation law, as amended by section 4 of part  G  of
    14  chapter  57 of the laws of 2011, is amended and a new subparagraph (a-1)
    15  is added to read as follows:
    16    (a) Any group consisting exclusively of such  employers  may  adopt  a
    17  plan  for  self-insurance,  as  a group, for the payment of compensation

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD10394-02-3
        S. 6410--A                          2

     1  under this chapter to their employees, except that  no  new  groups  may
     2  adopt  such  a plan, and no group not composed solely of public entities
     3  set forth in subparagraph (a-1) of this paragraph [a of subdivision four
     4  of  this  section]  may  insure any liabilities for any employers on and
     5  after January first, two thousand twelve,  except  as  provided  for  in
     6  paragraph  ten  of  this  subdivision.  Under  such plan the group shall
     7  assume the liability of all the employers within the group and  pay  all
     8  compensation for which the said employers are liable under this chapter,
     9  except  that  in the case of [municipal corporations] public group self-
    10  insurers as [herein] defined in subparagraph (a-1) of this paragraph  no
    11  proof of financial ability or deposit of securities or cash need be made
    12  in  compliance  with  this  subdivision. The group qualifying under this
    13  subdivision shall be known as a group  self-insurer  and  the  employers
    14  participating therein and covered thereby shall be known as members.
    15    (a-1)  Any  group  consisting  exclusively  of  public corporations as
    16  defined in section sixty-six of the  general  construction  law,  county
    17  self-insurance  plans  established  under  article five of this chapter,
    18  boards of cooperative educational services and consortia established  by
    19  boards of cooperative educational services, and any other entity defined
    20  as  a  public  entity  under  paragraph  fifty-one  of subsection (a) of
    21  section one hundred seven of the insurance law except the state  of  New
    22  York,  may  adopt a plan for self-insurance, as a group, for the payment
    23  of compensation under this chapter to  their  employees.  Such  a  group
    24  shall be known as a "public group self-insurer". A county self-insurance
    25  plan  established  under  article  five  of this chapter is not itself a
    26  public group self-insurer and is not itself subject to the  requirements
    27  of  this  section,  but  may join a public group self-insurer and, if it
    28  does so, shall assume all of the obligations of its participants to  the
    29  public  group  self-insurer.    A public group self-insurer shall comply
    30  with all of the requirements of this subdivision,  including  any  obli-
    31  gations  imposed  upon  a  group  administrator,  but is not required to
    32  secure the services of a group administrator or obtain a license author-
    33  izing it to act as a group self-insurer administrator, to furnish satis-
    34  factory  proof  to  the  chair of its financial ability to  pay  compen-
    35  sation from its revenues,  their  source  and  assurance of continuance,
    36  to  pay  a license fee, or to deposit securities, post a bond or provide
    37  other security, except as specifically provided in this subdivision.
    38    § 3. Subdivision 3-a of section 50 of the workers' compensation law is
    39  amended by adding a new paragraph 3-a to read as follows:
    40    (3-a) If the chair determines that a  public  group  self-insurer  has
    41  become insolvent, the chair shall pay the compensation and benefits that
    42  would  otherwise  have  been  required  to be paid by the members of the
    43  public group self-insurer from administration expenses  as  provided  in
    44  section  one hundred fifty-one of this chapter upon audit and warrant of
    45  the comptroller and upon vouchers approved by the chair, which  payments
    46  shall  be  considered  expenses  of administration. For purposes of this
    47  paragraph, a public group self-insurer  is insolvent when the  value  of
    48  the  public  group self-insurer's assets is less than the total costs of
    49  the workers' compensation liabilities that it is anticipated the  public
    50  group  self-insurer  will  be  required to pay within the succeeding six
    51  months or that the compensation and benefits provided  by  this  chapter
    52  may  be  unpaid by reason of the default of a public group self-insurer.
    53  Upon the insolvency of a public group self-insurer,  each  member  shall
    54  assume  responsibility  for  the continued administration and payment of
    55  all claims against it, provided however that the public  group  self-in-
    56  surer  shall,  within thirty days, turn its assets over to the chair and
        S. 6410--A                          3

     1  the chair shall assume the administration and cost of the claims of  the
     2  public  group  self-insurer  for a period not to exceed one year. During
     3  the period of chair administration of claims, each member of the  public
     4  group self-insurer shall secure the services of a licensed claims admin-
     5  istrator  and  the  chair  shall segregate the claims obligations of the
     6  insolvent public group self-insurer by member, and, if necessary  segre-
     7  gate  an  adequate  claim reserve for any claims of defunct or insolvent
     8  members of the insolvent public group self-insurer. Not later  than  one
     9  year  from  the  assumption  of  the administration of the claims of the
    10  public group self-insurer, each member of  the  insolvent  public  group
    11  self-insurer shall resume administration of its own claims and the chair
    12  shall  return to each member whatever pro rata share of the public group
    13  self-insurer's assets remain after the period of  chair  administration.
    14  The  chair shall be reimbursed for any payment made under this paragraph
    15  by the public group self-insurer itself and, if the public  group  self-
    16  insurer  is unable to reimburse the chair fully for payments made by the
    17  chair, then by the member of the public group self-insurer against which
    18  the claim is asserted. Further, nothing herein shall preclude the  chair
    19  from  directing  that  an  underfunded public group self-insurer levy an
    20  assessment on its members as part of a plan for achieving  fully  funded
    21  status  which  may include a deficit assessment on members of such group
    22  self-insurer which shall be subject to approval or modification  by  the
    23  chair. No member shall be liable for any obligations of the public group
    24  self-insurer  or any obligations of any member of the public group self-
    25  insurer. The chair shall require any member that has pending claims  but
    26  has  failed to secure the services of a licensed claims administrator to
    27  resume administration of the claims to pay to the chair any expenses the
    28  chair incurs in administering and paying those claims.
    29    § 4. Paragraph (g) of subdivision 3-e of section 50  of  the  workers'
    30  compensation  law,  as  added  by  chapter  729  of the laws of 1993, is
    31  amended and a new paragraph (h) is added to read as follows:
    32    (g) The state insurance fund[,] and any other insurer  [or  any  group
    33  self-insurer  for  municipal  corporations  as  defined  in  subdivision
    34  three-a of this section] may, at its option, offer a  deductible  in  an
    35  amount specified in paragraph (c) of this subdivision to any policyhold-
    36  er  who  is  not otherwise eligible for a deductible under this subdivi-
    37  sion. A public group self-insurer may offer a deductible  in  accordance
    38  with paragraph (h) of this subdivision.
    39    (h)  A  public  group  self-insurer  which has been providing workers'
    40  compensation and employers' liability coverage for not  less  than  five
    41  years  and is operated as a self-administered not-for-profit corporation
    42  governed by a board not less than two-thirds of the members of which are
    43  representatives of members of the public group self-insurer, and all  of
    44  the officers of which are representatives of members of the public group
    45  self-insurer may, upon a determination by the chair that the methodology
    46  used  by the public group self-insurer in creating its deductible rating
    47  plan is supported by an actuarial analysis prepared by  an  independent,
    48  qualified actuary who is a member of the casualty actuarial society that
    49  clearly identifies the actuary's rate assumptions, and subject to under-
    50  writing by the public group self-insurer, offer as part of the policy or
    51  by  endorsement,  deductibles optional to the member, not subject to the
    52  foregoing monetary limits, consistent with the following:
    53    (1) claimants' rights are properly protected, and claimants'  benefits
    54  are paid without regard to any such deductible;
    55    (2)  appropriate  premium reductions reflect the type and level of any
    56  deductible approved by the chair and selected by the member;
        S. 6410--A                          4

     1    (3) premium reductions for deductibles are determined before  applica-
     2  tion  of  any  experience  modification,  premium  surcharge, or premium
     3  discount;
     4    (4)  recognition is given to member's characteristics, including size,
     5  financial capabilities, nature of activities, and number of employees;
     6    (5) if the member selects a deductible, the member is  liable  to  the
     7  public  group  self-insurer for the deductible amount in regard to bene-
     8  fits paid for compensable claims;
     9    (6) the public group self-insurer pays all of the  deductible  amount,
    10  applicable to a compensable claim, to the person or provider entitled to
    11  benefits and then seeks reimbursement from the member for the applicable
    12  deductible amount;
    13    (7)  a  failure  by  the member to reimburse deductible amounts to the
    14  public group self-insurer is treated in the same manner as nonpayment of
    15  the member's contribution;
    16    (8) the public group self-insurer shall be fully-funded as defined  in
    17  subparagraph (b) of paragraph two of subdivision three-a of this section
    18  and if, after offering deductible policies, the public group self-insur-
    19  er ceases to be fully funded as so defined, the public group self-insur-
    20  er  may  not  permit any new member to elect the deductible option until
    21  the public group self-insurer becomes fully funded;
    22    (9) the public group self-insurer may  add  no  more  than  seven  new
    23  deductible members in any one contribution year;
    24    (10)  the  aggregate  contributions  for all new members selecting the
    25  deductible option in any one year may not  exceed  ten  percent  of  the
    26  total  contributions  of  all of the public group self-insurer's members
    27  for the immediately prior year;
    28    (11) if the member was self-insured prior to joining the public  group
    29  self-insurer,  the  member's deductible amount during the member's first
    30  year of membership in the public group self-insurer may not  exceed  the
    31  amount  of  the  member's reinsurance retention level immediately before
    32  joining the public group self-insurer;
    33    (12) each member which has elected the deductible  option  shall:  (i)
    34  maintain in a dedicated account held by the public group self-insurer an
    35  amount  actuarially  determined  to  be sufficient to pay the portion of
    36  each compensation claim that is within the  deductible  amount  for  the
    37  succeeding  three months; and (ii) maintain in its own dedicated reserve
    38  account or in its own undesignated fund balance, the  actuarially-deter-
    39  mined  amount  that  the  member  will be required to pay for all of the
    40  member's claims below the deductible amount; and
    41    (13) the public group self-insurer shall provide to all members of the
    42  public group self-insurer an annual statement identifying  the  contrib-
    43  utions  provided  by  and the reserves attributable to the members which
    44  have elected a deductible and must provide to each member of the  public
    45  group  self-insurer  which  has  elected the deductible option an annual
    46  actuarial analysis of the member's open claims, stating the amounts  the
    47  public  group  self-insurer anticipates that the member will be required
    48  to pay for the life of each claim.
    49    § 5. Section 70 of the workers' compensation law, as added by  chapter
    50  849 of the laws of 1955, is amended to read as follows:
    51    §  70.  Excess  or  catastrophe insurance; public group self-insurance
    52  plans.  1. The committee or administrator, subject to  the  approval  of
    53  the  board  of supervisors, may on behalf of the plan purchase excess or
    54  catastrophe insurance. The cost of such insurance shall be  an  adminis-
    55  trative expense of the plan.
        S. 6410--A                          5

     1    2.  The  committee  or  administrator,  subject to the approval of the
     2  board of supervisors, may on behalf of the  plan  join  a  public  group
     3  self-insurer  established  under subdivision three-a of section fifty of
     4  this chapter. Notwithstanding any other provision of this chapter,  when
     5  the committee or administrator contracts on behalf of the plan to join a
     6  public group self-insurer:
     7    a.  the  public  group  self-insurer,  the county and each participant
     8  shall remain liable in the manner provided in the plan for  claims  made
     9  prior to the date on which the plan joins the public group self-insurer;
    10  and
    11    b.  the  committee  or  administrator shall establish, before the plan
    12  joins the public group self-insurer, a  method,  which  may  be  amended
    13  annually thereafter, by which to apportion among the participants in the
    14  plan the cost of its membership in the public group self-insurer and all
    15  claims  made  after  the  date  on which the plan joins the public group
    16  self-insurer, and each participant in the plan shall pay its  respective
    17  share  of  the  cost  to  the county treasurer, who shall pay the public
    18  group self-insurer on behalf of all plan participants.
    19    § 6. Subdivision 9 of section 30 of the volunteer firefighters'  bene-
    20  fit  law,  as  amended  by chapter 61 of the laws of 1989, is amended to
    21  read as follows:
    22    9. Insurance authorized to be purchased pursuant to subdivision  eight
    23  of  this  section may be secured from the state fund or any stock corpo-
    24  ration, mutual corporation or reciprocal insurer authorized to  transact
    25  the  business  of workers' compensation in this state. If such insurance
    26  is not secured, the political subdivision liable shall be deemed to have
    27  elected to be a self-insurer unless it is a participant in a county plan
    28  of self-insurance or its liability for benefits under  this  chapter  is
    29  covered  by a town's participation in a county plan of self-insurance as
    30  provided in subdivision three of section  sixty-three  of  the  workers'
    31  compensation  law  or  is a participant in a public group self-insurance
    32  plan established under subdivision three-a of section fifty of the work-
    33  ers' compensation law. Every such self-insurer shall file with the chair
    34  of the workers' compensation board a notice of such election  prescribed
    35  in  form  by such chair. For failure to file such notice within ten days
    36  after such election is made, the treasurer or other  fiscal  officer  of
    37  such  political  subdivision  shall be liable to pay to the chair of the
    38  workers' compensation board the sum of one hundred dollars as a penalty,
    39  to be transferred to the state treasury. A notice of election  to  be  a
    40  self-insurer  for  compensation  and  benefits to volunteer firefighters
    41  under the provisions of the workers' compensation law  and  the  general
    42  municipal  law  in  effect prior to March first, nineteen hundred fifty-
    43  seven, which was filed prior to such date pursuant to the provisions  of
    44  subdivision four of section fifty of the workers' compensation law as in
    45  effect  prior  to  such  date shall be deemed to be a notice of election
    46  filed under this section unless the chair of the  workers'  compensation
    47  board  is  notified to the contrary.  The provisions of subdivision five
    48  of section fifty of the workers' compensation law shall be applicable to
    49  such self-insurers.
    50    § 7. Subdivision 8 of section 30 of the volunteer  ambulance  workers'
    51  benefit law, as amended by chapter 61 of the laws of 1989, is amended to
    52  read as follows:
    53    8.  Insurance authorized to be purchased pursuant to subdivision seven
    54  of this section may be secured from the state fund or any  stock  corpo-
    55  ration,  mutual  corporation,  group self-insurers or reciprocal insurer
    56  authorized to transact the business of  workers'  compensation  in  this
        S. 6410--A                          6

     1  state.    If  such  insurance  is not secured, the political subdivision
     2  liable shall be deemed to have elected to be a self-insurer unless it is
     3  a participant in a county plan of self-insurance or  its  liability  for
     4  benefits  under  this  chapter is covered by a town's participation in a
     5  county plan of self-insurance as provided in subdivision nine of section
     6  sixty-three of the workers' compensation law or is a  participant  in  a
     7  public  group  self-insurance plan established under subdivision three-a
     8  of section fifty of the workers' compensation law. Every  such  self-in-
     9  surer  shall  file  with  the chair of the workers' compensation board a
    10  notice of such election prescribed in form by such chair. For failure to
    11  file such notice within ten days after such election is made, the treas-
    12  urer or other fiscal officer of  such  political  subdivision  shall  be
    13  liable to pay to the chair of the workers' compensation board the sum of
    14  one  hundred dollars as a penalty, to be transferred to the state treas-
    15  ury. A notice of election to be  a  self-insurer  for  compensation  and
    16  benefits  to  volunteer  ambulance  workers  under the provisions of the
    17  workers' compensation law and the general municipal law in effect  prior
    18  to  March  first,  in  the  year of enactment of this chapter, which was
    19  filed prior to such date pursuant to the provisions of subdivision  four
    20  of  section fifty of the workers' compensation law as in effect prior to
    21  such date shall be deemed to be a notice of election  filed  under  this
    22  section  unless the chair of the workers' compensation board is notified
    23  to the contrary. The provisions of subdivision five of section fifty  of
    24  the workers' compensation law shall be applicable to such self-insurers.
    25    §  8.  Paragraph  b  of  subdivision 2 of section 119-o of the general
    26  municipal law, as amended by chapter 681 of the laws of 1961, is amended
    27  to read as follows:
    28    b. The manner of employing, engaging,  compensating,  transferring  or
    29  discharging  necessary personnel, subject, however, to the provisions of
    30  the civil  service  law  where  applicable;  the  making  of  employer's
    31  contributions  for retirement, social security, health insurance, [work-
    32  men's] workers' compensation, volunteer firefighter and volunteer  ambu-
    33  lance  worker  benefits, including participation in a public group self-
    34  insurer, and other similar benefits;  the  approval  of  attendances  at
    35  conventions,  conferences  and  schools  for  public  officials  and the
    36  approval and payment of  travel  and  other  expenses  incurred  in  the
    37  performance  of  official duties; the bonding of designated officers and
    38  employees; the filing of oaths of  office  and  resignations  consistent
    39  with  general  laws  applicable  thereto;  provisions  that for specific
    40  purposes designated officers or employees of  the  joint  service  or  a
    41  joint water, sewage or drainage project shall be deemed those of a spec-
    42  ified participating corporation or district; and provisions that person-
    43  nel  assigned  to  a  joint service or a joint water, sewage or drainage
    44  project shall possess the same powers, duties, immunities and privileges
    45  they would ordinarily possess (1) if they performed their duties only in
    46  the corporation or district by which they are employed or  (2)  if  they
    47  were  employed by the corporation or district in which they are required
    48  to perform their duties.
    49    § 9. This act shall take effect immediately.