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New York employers resist worker's comp 'bailout' plan

Posted on Jun 18, 2008

As soon as this fall, dozens of employers in the Capital Region will face hefty bills from the state Workers' Compensation Board. They'll be asked to make up for years of underpayment into so-called self-insured trusts that provided their coverage for on-the-job injuries.

Those trusts have failed, and their administrator has agreed to give up its license.

In the meantime, however, healthy self-insured trusts are being asked to cover the failed trusts' costs, and that has triggered a legal battle.

Attorney Richard Honen of the Albany law firm Phillips Lytle LLP calls it a "bailout ... unique even for New York."

Honen, representing a group of 13 trusts -- basically employers that formed pools to self-insure against workers' compensation claims -- says they've seen their combined annual assessments to the board climb from $150,000 a year to $12 million this year. The assessments typically pay for the operation of the board, including regulatory oversight of the trusts.