N.Y. Workers' Compensation Law § 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:
1. (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.
1. (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.
2. (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.
3. (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:
  1. (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.
  2. (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.
  3. (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:
1. (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.
2. (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.
3. (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.
4. (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.
5. (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:
1. (a) the amount of funds distributed;
2. (b) a description of each resulting conviction, including:
  1. (i) the full name of the defendant;
  2. (ii) the date of conviction;
  3. (iii) a description of the offense;
  4. (iv) the amount of money alleged to have been defrauded; and
  5. (v) a description of any offenses other than workers' compensation fraud for which the defendant was simultaneously convicted;
3. (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
4. (d) the number of new positions created and persons hired for positions within dedicated workers' compensation fraud units.