Workers' Compensation Board - Option to Self-Insure for Jockey Fund
NY-ADR
2/28/18 N.Y. St. Reg. WCB-09-18-00008-E
NEW YORK STATE REGISTER
VOLUME XL, ISSUE 9
February 28, 2018
RULE MAKING ACTIVITIES
WORKERS' COMPENSATION BOARD
EMERGENCY RULE MAKING
I.D No. WCB-09-18-00008-E
Filing No. 161
Filing Date. Feb. 13, 2018
Effective Date. Feb. 13, 2018
Workers' Compensation Board - Option to Self-Insure for Jockey Fund
PURSUANT TO THE PROVISIONS OF THE State Administrative Procedure Act, NOTICE is hereby given of the following action:
Action taken:
Addition of Part 320 to Title 12 NYCRR.
Statutory authority:
Workers' Compensation Law, section 117
Finding of necessity for emergency rule:
Preservation of general welfare.
Specific reasons underlying the finding of necessity:
This amendment is adopted as an emergency measure because time is of the essence. On April 10, 2017, the New York Legislature adopted Chapter 59 of the Laws of 2017, which, among other things, significantly altered the New York Jockey Injury Compensation Fund, Inc. (hereinafter, Jockey Fund or Fund) (see Racing, Pari-Mutuel Wagering and Breeding Law section 221[6][b], as amended by L 2017, ch 59, part SS). Under Racing, Pari-Mutuel Wagering and Breeding Law section 221(6), the Jockey Fund is required to secure workers’ compensation coverage for the benefit of all jockeys, apprentice jockeys, and exercise persons licensed pursuant to Racing, Pari-Mutuel Wagering and Breeding Law articles two and four. Under the amended law, the Jockey Fund may now elect to secure workers’ compensation insurance coverage through a form of self-insurance (see id.). This amendment to the Jockey Fund took effect immediately (see L 2017, ch 59, part SS, section 12). Therefore, it is imperative that the Board adopt emergency regulations regarding the procedure the Jockey Fund must follow to self-insure before the Fund elects to become self-insured.
Subject:
Workers' Compensation Board - option to self-insure for Jockey Fund.
Purpose:
Allows the option for the Jockey Fund to self-insure for Workers' Compensation coverage.
Text of emergency rule:
Subchapter B of Title 12 NYCRR is amended to add a new Part 320, as follows:
Part 320. New York Jockey Injury Compensation Fund, Inc.
Section 320.1. Definitions
(a) “Fund” means the New York Jockey Injury Compensation Fund, Inc.
(b) “Board” means the New York State Workers’ Compensation Board.
(c) “Chair” means the chairperson of the New York State Workers’ Compensation Board.
(d) “Self-insure” and “self-insurance” shall have the same meaning as set forth under section 50 of the workers’ compensation law.
(e) “Employees of licensed trainers or owners” shall have the same meaning as subdivision twenty-four of section 2 of the workers’ compensation law.
Section 320.2. Application to Self-Insure
(a) In order for the Fund to self-insure pursuant to subdivision three of section 50 of the workers’ compensation law and paragraph b of subdivision six of section 221 of the racing, pari-mutuel wagering and breeding law, the Fund shall furnish satisfactory proof to the chair of its financial ability to pay workers’ compensation. Such proof shall consist of a notice of intent to self-insure and satisfactory proof of the financial ability to self-insure.
(b) Satisfactory proof of the financial ability to self-insure shall consist of the following: (1) the posting of a security deposit with the Board, as determined and calculated by the Board using full annual payroll by class code; and (2) proof of excess insurance coverage in an amount determined by the Board.
(c) The proof provided to the chair shall also contain audited financial statements as prescribed by the Board.
(d) The chair may determine that the proof of financial ability to pay workers compensation is insufficient for good cause shown, in that the Fund has failed to tender satisfactory proof of its financial ability to self-insure.
(e) Upon the chair’s approval to self-insure, the Fund shall also obtain approval to self-insure from the gaming commission, pursuant to paragraph b of subdivision six of section 221 of the racing, pari-mutuel wagering and breeding law.
(f) The Fund will be deemed to be self-insured pursuant to subdivision three of section 50 of the workers’ compensation law as of the date the gaming commission grants approval to self-insure.
Section 320.3. Annual Coverage and Assessments
(a) Upon approval to self-insure by both the chair of the Board and the gaming commission, on the date established pursuant to paragraph f of Part 320.2 of this Subchapter, the Fund shall remit to the Board the assessment established by the chair pursuant to section 151 of the workers’ compensation law, in the manner consistent with subdivision five of section 151 of the workers’ compensation law, and the assessment established by the chair and the department of audit and control pursuant to paragraph (c) of subdivision five of section 50 of the workers’ compensation law, in the manner set forth in paragraph (e) of subdivision five of section 50 of the workers’ compensation law.
(b) Annually, no later than April first of each fiscal year, and for the duration that the Fund elects to self-insure, the Fund shall submit to the board all financial statements, payroll information, and workers’ compensation claims to continue its status as a self-insurer pursuant to subdivision 3 of section 50 of the workers’ compensation law.
(c) Annually, based upon the financial information submitted, the Chair shall reassess the Fund’s proof of the financial ability to self-insure. Upon completion of such review, the Chair may adjust the required security. If additional security is required to be posted, the Fund shall submit such amounts within 90 days of notification. In the event that such additional security is not posted, the chair may determine that the proof of financial ability to pay workers compensation is insufficient for good cause shown, and the Fund ‘s self-insurance status may be terminated.
(d) Any owner or trainer that is licensed under article two or four of the racing, pari-mutuel wagering and breeding law and that is a member of the Fund shall not charge any jockey, apprentice jockey, or exercise person for any portion of the cost of joining and/or being a member of the Fund. In the event the Fund elects, with the approval of the gaming commission, to secure workers’ compensation insurance for employees of licensed trainers or owners, owners and licensed trainers that are members of the Fund shall not charge said employees for any portion of the cost of joining and/or being a member of the Fund.
Section 320.4. Reserve
(a) Following approval to self-insure by the chair and the gaming commission, the Fund shall establish a self-insurance reserve to provide coverage in the event that the Fund is deficient. The board of directors of the Fund shall establish an annual fee to be paid by owners and licensed trainers that are members of the Fund for the purposes of contributing to the reserve. The reserve shall be established no later than 60 days following the approval to self-insure by both the chair and the gaming commission, on that date set forth pursuant to paragraph f of Part 320.2 of this Subchapter. At the time of establishment and annually thereafter, the Fund shall provide the Board with detailed information concerning the reserve. Such information shall include the financial institution holding the reserve as well as account information, the account balance, and any deposits to and debits from such reserve in the preceding year.
(b) The Fund may at any time in its discretion expend moneys in such reserve to pay any liability of the plan.
(c) In the event the Fund no longer self-insures, all moneys remaining in such reserve in excess of an amount sufficient to satisfy all accrued and contingent liabilities, shall be refunded to the owners and licensed trainers that are members of the Fund in such manner as may be established by the board of directors of the Fund.
This notice is intended
to serve only as a notice of emergency adoption. This agency intends to adopt this emergency rule as a permanent rule and will publish a notice of proposed rule making in the State Register at some future date. The emergency rule will expire May 13, 2018.
Text of rule and any required statements and analyses may be obtained from:
Heather MacMaster, Workers' Compensation Board, 328 State Street, Schenectady, NY 12305, (518) 486-9564, email: [email protected]
Regulatory Impact Statement
1. Statutory authority:
The Board is authorized to amend Title 12 of the NYCRR to add a new section 320. The Board’s authority is derived from WCL § 117(1), which authorizes the Chair of the Board to adopt reasonable regulations consistent with and supplemental to the provisions of the WCL and the Labor Law. The Board’s authority also stems from Racing, Pari-Mutuel Wagering and Breeding Law § 221(6)(b), as amended by Chapter 59 of the Laws of 2017, which allows the Jockey Fund to secure workers’ compensation insurance through a form of self-insurance, “provided that the fund has met the requirements of the [Board], including, without limitation, subdivision three of section fifty of the workers’ compensation law.”
2. Legislative objectives:
WCL § 117(1) authorizes the Chair to adopt reasonable regulations to supplement the WCL. The WCL was enacted for socio-economic remediation purposes to protect workers and their dependents from economic hardship in case of injury on the job (see Matter of Post v Burger & Gohlke, 216 NY 544 [1916]; see also Matter of LaCroix v Syracuse Exec. Air Serv., Inc., 8 NY3d 348 [2007]). The proposed rule will advance these objectives by protecting employees of the Jockey Fund, including jockeys, apprentice jockeys, and exercise persons, from economic hardship by ensuring that the Jockey Fund has adequate resources to compensate them for work-related injuries in the event that the Fund elects to self-insure.
3. Needs and benefits:
Pursuant to Racing, Pari-Mutuel Wagering and Breeding Law § 221(6), the Jockey Fund is required to secure workers’ compensation coverage for the benefit of all jockeys, apprentice jockeys, and exercise persons licensed pursuant to Racing, Pari-Mutuel Wagering and Breeding Law articles two and four. As recently amended by Chapter 59, Part SS, of the Laws of 2017, the Jockey Fund may now elect to secure workers’ compensation insurance coverage through a form of self-insurance (see Racing, Pari-Mutuel Wagering and Breeding Law § 221[6][b]). The Board believes that this proposed rule is necessary to ensure that, in the event that the Jockey Fund opts to self-insure, the Fund has adequate resources to compensate injured employees for work-related injuries.
Under existing law, employers who wish to self-insure must submit certain financial records to establish their financial ability to self-insure and tender a security deposit to the Board (see WCL § 50[3],[4]; 12 NYCRR parts 315, 316). The Board’s self-insurance office reviews this information to determine adequate security amounts for each self-insurer. The proposed rule would impose similar requirements on the Jockey Fund if it wishes to self-insure. As such, the proposed regulation brings the Jockey Fund’s new ability to self-insure in line with existing workers’ compensation law and clarifies the procedures the Jockey Fund must follow to be deemed a self-insurer by the Board. The Board is also cognizant of the fact that the employees of the Jockey Fund, including jockeys, apprentice jockeys, and exercise persons, are exposed to an inherently dangerous work environment given the nature of their employment. As such, it is the Board’s position that the requirements to self-insure set forth in the proposed rule are necessary to protect those workers who face a high likelihood of work-related injuries.
4. Costs:
This proposal will impose a cost only on owners and licensed trainers who are subject to Racing, Pari-Mutuel Wagering and Breeding Law articles two and four, and only in the event that the Jockey Fund elects to self-insure. Specifically, the rule requires such owners and licensed trainers to pay an annual fee into a self-insurance reserve created under this regulation. The amount to be paid by the owners and licensed trainers will be determined by the board of directors of the Jockey Fund. However, the proposed rule allows for all moneys remaining in the reserve in excess of an amount sufficient to satisfy all accrued and contingent liabilities to be refunded to the owners and licensed trainers that are members of the Jockey Fund. The proposed rule does not impose costs on other regulated parties, the Board, the State, or local governments for its implementation and continuation.
5. Local government mandates:
The proposed regulation does not impose any program, service, duty, or responsibility upon any county, city, town, village, school district, fire district, or other special district.
6. Paperwork:
This proposed rule requires the Jockey Fund, in the event it elects to self-insure, to submit to the Board an application for self-insurance and the following financial statements to demonstrate satisfactory proof of its financial ability to pay workers’ compensation: (1) the posting of a security deposit with the Board, (2) proof of excess insurance coverage in an amount determined by the Board, and (3) audited financial statements. The proposed rule also requires the Jockey Fund to submit to the Board, on an annual basis for the duration that the Fund self-insures, all financial statements, payroll information, workers’ compensation claims, and proof of the Fund’s financial ability to self-insure. The proposed rule does not require any entity other than the Jockey Fund to comply with any reporting requirements.
7. Duplication:
The proposed rule does not duplicate or conflict with any state or federal requirements.
8. Alternatives:
One alternative discussed was to take no action. However, the Board felt that it was more prudent to take action out of concern that failing to assess the Jockey Fund’s financial ability to self-insure would result in there being insufficient funds to compensate employees of the Jockey Fund. The Board did not believe that taking such a risk was reasonable given the dangerous nature of employment engaged in by employees of the Jockey Fund.
9. Federal standards:
There are no federal standards applicable to this proposed rule.
10. Compliance schedule:
It is expected that the affected parties will be able to comply with this change immediately.
Regulatory Flexibility Analysis
1. Effect of rule:
This proposed rule allows for alternative formats of certification for employees taking paid family leave to care for family members in Puerto Rico affected by Hurricane Maria. It allows alternative formats in an effort to minimize the burden because many businesses are not operational. The rule will have no effect on local governments.
2. Compliance requirements:
This rule would simply relax the current required certification formats in Part 380, and allow a greater variety of acceptable certification. The rules are not changed as far as what information needs to be supplied, but the range of acceptable formats has been widened.
3. Professional services:
The Board believes that no professional services will be needed to comply with this rule. This rule actually relaxes the current requirements for health care providers in providing employees with certification to take paid family leave to care for family members in Puerto Rico.
4. Compliance costs:
This rule is not expected to impose any additional cost for compliance on the employees who will be taking the leave or the health care providers completing the certification. This rule is designed to ease the burden of businesses dealing with the aftermath of the hurricane in Puerto Rico, and allows a wider range of formats for certification to avoid the increased costs that could arise if they had no alternatives. There could be a cost to carriers or self-insured employers in accepting various formats than what Part 380 currently specifies, but the emergency nature of the regulation minimizes any costs by being a temporary measure, as well as flexibility in how the carrier or self-insured employer accepts the request for paid family leave and certifications.
5. Economic and technological feasibility:
No implementation or technology costs are anticipated for small businesses and local governments for compliance with the proposed rule. Therefore, it will be economically and technologically feasible for small businesses and local governments affected by the proposed rule to comply with the rule. In fact, this rule is written specifically to address the situation many employees with family members in Puerto Rico face – a lack of access to technology and day to day business operations.
6. Minimizing adverse impact:
The Board anticipates that the proposed rule should not have any adverse impact on small businesses and local government, because it relaxes the requirements for certification. It allows for a broader category of formats of certification to be accepted in requesting paid family leave.
7. Small business and local government participation:
Because time is of the essence, the Board has not yet had an opportunity to consult with small businesses or local governments during the rule-drafting process. However, this is a temporary measure to address the disaster in Puerto Rico, and as it relaxes the requirements, should not have an adverse impact.
Rural Area Flexibility Analysis
1. Types and estimated numbers of rural areas:
This rule applies to the Jockey Fund, a not-for-profit corporation that, under the WCL, is considered the “employer” of certain jockeys, apprentice jockeys, and exercise persons performing services for an owner or trainer in connection with the training or racing of a thoroughbred horse, as set forth in articles two and four of the Racing, Pari-Mutuel Wagering and Breeding Law. The proposal would also affect the owners and trainers that are members of the Jockey Fund. As such, the rule is expected to have no impact on rural areas insofar as it pertains only to a specific corporation and its members, and the benefits derived from the rule will be seen by employees of the Jockey Fund in all areas of the state.
2. Reporting, recordkeeping and other compliance requirements:
Under this new rule, the Jockey Fund will be required to file with the Board a notice of intent to self-insure as well as financial statements in order to prove its financial ability to self-insure. Additionally, the new rule requires the Jockey Fund to submit annual financial statements to the Board in order for the Board to annually reassess the Jockey Fund’s financial ability to self-insure. These reporting and compliance requirements will affect only the Jockey Fund in the event it decides to self-insure and will not affect rural areas.
3. Costs:
This proposal will not impose any compliance costs on rural areas. The rule solely establishes a procedure the Jockey Fund must undergo in order to self-insure.
4. Minimizing adverse impact:
This proposed rule is designed to minimize the adverse impact that employees of the Jockey Fund may face in the event that the Jockey Fund is financially unable to compensate its employees for their work-related injuries. This rule establishes a procedure that the Jockey Fund must follow before becoming self-insured as well as an annual financial reassessment process to ensure that the Jockey Fund is financially capable of paying injured workers for their workers’ compensation claims. Therefore, the proposal will benefit employees of the Jockey Fund, including jockeys and exercise persons, statewide.
5. Rural area participation:
The Board received input from persons within the Board’s self-insurance unit to ensure that the requirements set forth in the proposed rule will allow the Board to accurately assess the financial stability of the Jockey Fund and are comparable to self-insurance requirements of other entities statewide.
Job Impact Statement
The proposed regulation will not have an adverse impact on jobs. The regulation merely establishes the procedure that the Jockey Fund must follow with the Workers’ Compensation Board (hereinafter, the Board) in order to be permitted to self-insure pursuant to Workers’ Compensation Law (WCL) section 50(3) and Racing, Pari-Mutuel Wagering and Breeding Law section 221(6)(b). These regulations will ultimately benefit the Jockey Fund by providing a clear path for self-insurance, while also benefitting the participants to the workers’ compensation system by ensuring that the Jockey Fund has sufficient resources to compensate injured employees for work-related injuries.
| End of Document |