Section 60-1.3 describes:

(a) the intent of this Rule to: (1) reduce occupational injuries and illnesses in the workplace; (2) return injured or ill employees to work; (3) reduce workers' compensation costs for employers; and (4) reward employers that have implemented a quality WSLPIP;

(b) the purpose of this Rule to set forth: (1) the procedures that must be followed in order for an employer to apply for and receive approval of a WSLPIP; (2) the minimum requirements for each WSLPIP; (3) the basic education or experience required of an individual to be Certified as a Specialist;

Section 60-1.4 (a) describes the eligibility requirements for an employer insured by the New York State Insurance Fund or any other authorized insurer that issues policies of workers' compensation insurance; (b) describes the eligibility requirements of an individually self-insured employer; (c) requires compliance with the procedures set forth in this Part and with New York State Labor Law and Workers' Compensation Law; (d) excludes employers required to implement a mandatory safety and loss prevention program from WSLPIP eligibility; (e) includes employers that have a preexisting program that complies with this Part in eligibility; and (f) subjects a group member's eligibility to the authorization of and limitations set by the Chair in addition to the requirements set forth in this Part.

Section 60-1.5 (a) describes the resources available to employers in establishing a compliant WSLPIP; (b) requires an implemented WSLPIP to undergo an Evaluation by a Certified Specialist and describes the employer's options for obtaining those services; (c) allows for the eligibility of previously implemented programs that meet the requirements of this Part; (d) describes the fees for Evaluations conducted by Department staff; (e) requires the Evaluation be conducted according to the criteria set forth by this Part; and (f) allows an employer implementing more than one WSLPIP to undergo a single Consultation and Evaluation for all of its programs.

Section 60-1.6 (a) requires that an employer apply for WSLPIP approval using Department forms no later than 120 calendar days prior to the employer's annual policy renewal date, or the end of the calendar year for individually self-insured employers, and to provide a copy of the application to the employer's insurer or to the Board; for those employers who have an annual policy renewal date that falls between January 1, 2010 and March 3l, 2010 and who have a preexisting program that meets the criteria for any of the three incentive programs set out in these regulations, the Department will accept their initial application if postmarked no later than 90 calendar days prior to their annual policy renewal date; (b) requires that the employer use a Specialist to perform the Evaluation prior to application; (c) describes the application fees; (d) describes the information required on the application; (e) describes notification of approval, approval duration, and Incentive effective date; (f) describes the employer's responsibility for notification; (g) provides that the Department will notify the employer's insurer, the Superintendent, and the Board of the approval; and (h) requires employer record-keeping and continued compliance.

Section 60-1.7 (a) requires approved employers to submit an annual report in order to receive the Incentive in the second and third year of initial and renewal approval periods; (b) describes the information to be included on the annual report; (c) describes notification of approval; (d) describes the employer's responsibility for notification; (e) provides that the Department will notify the employer's insurer, the Superintendent, and the Board of the Review and approval; and (f) requires the employer to notify the Department and its insurer or the Board if it discontinues a WSLPIP during an approval period.

Section 60-1.8 (a) requires that Incentive renewal be sought by the employer no later than 90 days prior to the end of the initial three year approval period using Department forms; (b) describes the renewal application fees; (c) describes the information required on the renewal application; (d) requires that the WSLPIP report and Verification comply with the procedures in Section 60-1.8; (e) describes notification of approval and Incentive effective date; (f) describes the employer's responsibility for notification; (g) provides that the Department will notify the employer's insurer, the Superintendent, and the Board of the approval; and (h) requires employer record-keeping and continued compliance.

Section 60-1.9 provides that: (a) the Incentive provided to insured employers for implementation and renewal of each WSLPIP shall be in accordance with Section 134 (6) of the Workers' Compensation Law; and (b) the reduction in the security deposit provided to individually self-insured employers for implementation and renewal of each WSLPIP shall be pursuant to Section 134 (7) of the Workers' Compensation Law.

Section 60-1.10 (a) describes the reasons why and method by which the Department may deny, revoke, or suspend Incentives and the procedure the employer may follow to correct their deficiencies; (b) subjects any approved WSLPIP to Monitoring by the Department and describes potential Monitoring activities; and (c) describes an employer's appeal rights should their application for Incentive be denied, revoked, or suspended.

Section 60-1.11 requires the employer to: (a) post the certificate of approval issued by the Department for each WSLPIP prominently in all work locations; (b) provide access to personnel, facilities, records, and documents required to carry out this Part to the Department and various parties identified by the Department and describes the penalty for failure to do so; (c) notify the Department about changes that relate to the WSLPIP; and (d) represent the status of a WSLPIP truthfully to the Department and describes the penalties for misrepresentation.

Section 60-1.12 (a) requires the insurer to apply each Incentive granted by the Department and the Superintendent to the employer's policy renewal period following the date of the Department's approval certificate; (b) requires an insurer to continue to apply an approved Incentive to a new policy that was originally provided by a prior insurer; (c) requires the insurer to report annually to the Commissioner and the Superintendent and describes the information to be reported; and (d) provides that the Chair of the Board shall maintain the information required by this Part and provide it to the Commissioner and the Superintendent on behalf of individually self-insured employers.

Section 60-1.13 describes: (a) the purpose and methods of a Safety Incentive Program; (b) the parties who may provide the services related to a Safety Incentive Program; (c) the documentation of a Safety Incentive Program required to qualify for an Incentive; (d) the elements required to be included in an acceptable Safety Incentive Program; and (e) the required dissemination and availability of the approved Safety Incentive Program plan to employees.

Section 60-1.14 describes: (a) the purpose and methods of a Drug and Alcohol Prevention Program; (b) the parties who may provide the services related to a Drug and Alcohol Prevention Program; (c) the documentation of a Drug and Alcohol Prevention Program required to qualify for an Incentive; (d) the elements required to be included in an acceptable Drug and Alcohol Prevention Program; and (e) the required dissemination and availability of the approved Drug and Alcohol Prevention Program plan to employees.

Section 60-1.15 describes: (a) the purpose and methods of a Return to Work Program; (b) the parties who may provide the services related to a Return to Work Program; (c) the documentation of a Return to Work Program required to qualify for an Incentive; (d) the elements required to be included in an acceptable Return to Work Program; and (e) the required dissemination and availability of the approved Return to Work Program plan to employees.

Section 60-1.16 describes: (a) the process a Safety and Loss Management Specialist must follow when conducting a WSLPIP Consultation and Evaluation, including communication with stakeholders, collection of information, analysis of historical loss and claim information, and industrial hygiene sampling procedures; and (b) the information required on the Evaluation Report.

Section 60-1.17 (a) requires a Specialist performing services identified in this Part to be Certified by the Department; (b) provides for designated Department employees to be automatically Certified and exempt from application requirements; (c) describes the qualifications required for Certification to conduct a Consultation and Evaluation of a Safety Incentive Program; (d) describes the qualifications required for Certification to conduct a Consultation and Evaluation of a Drug and Alcohol Prevention Program and provides for collaboration between the Department and the Office of Alcoholism and Substance Abuse Services in developing evaluation criteria to determine the acceptability of an applicant's experience; (e) describes the qualifications required for Certification to conduct a Consultation and Evaluation of a Return to Work Program; (f) describes the requirements for Certification as a Specialist in multiple Incentive Programs; (g) defines "professional experience;" (h) limits Specialists' activities to their area(s) of expertise as Certified by the Department; (i) describes the Specialist application and Recertification processes and their associated fees; (j) requires a Specialist applying for Recertification to advise the Department of any circumstance which would disqualify the Specialist from Recertification; (k) describes the circumstances under which the Department may deny, suspend, or revoke a Specialist's Certification; (l) requires an investigation, formal hearing, and written notification to revoke or suspend a Specialist's Certification; (m) describes the circumstances under which a Specialist's Certification may be reinstated; and (n) subjects a Specialist applying for reinstatement of Certification to those procedures pertaining to application for an original Certification.

Section 60-1.18 indicates that variances from the provisions of this Part may be granted in accordance with Article 2, Section 30 of the Labor Law.

Section 60-1.19 declares the provisions of this Part to be severable.

Section 60-1.20 declares that nothing contained in this Part shall abrogate or otherwise limit the responsibility of an employer to comply with all requirements set forth in State and Federal safety and health standards to which the employer would otherwise be subject, nor abrogate or otherwise limit the liability of such employer to fines or other penalties to which it would otherwise be subject for failure to comply with such Rules and Regulations.

Statutory Authority: Chapter 6, Section 33 of the Laws of 2007, titled the 2007 New York Workers' Compensation Law Reform, amended Article 7, Section 134(6-10) of the Workers' Compensation Law and directed the Commissioner of Labor to develop a Workplace Safety and Loss Prevention Incentive Program (WSLPIP) which encourages employers to voluntarily implement a Safety Incentive Program, a Drug and Alcohol Prevention Program, and/or a Return to Work Program by providing participating employers with a credit in workers' compensation premiums, or a reduction in the security deposit in the case of self-insured employers. The Commissioner of Labor was given the responsibility for monitoring all incentive plans implemented by the employer and for establishing rules for the certification of Safety and Loss Management Specialists who perform such services. The State Insurance Department was given the authority to determine the size of the credit in workers' compensation premiums, and the Workers' Compensation Board was given the authority to determine the reduction in the security deposit required by self-insured employers for each of the three incentive programs implemented.

Furthermore, the Commissioner of Labor was given statutory authority to make recommendations on how to help injured workers return to work under Chapter 6, Section 5 of the Laws of 2007, which established new Safety Net provisions in Section 35 of the Workers' Compensation Law. The Commissioner also has statutory authority under New York State Labor Law to monitor and enforce various workplace safety and health laws.

Legislative Objectives: The new legislation that amended Article 7, Section 134(6-10) was intended to (1) reduce occupational injuries and illnesses in the workplace; (2) return injured or ill employees to work; (3) reduce workers' compensation costs for employers; and (4) encourage and reward employers that have implemented or plan to implement quality, cost-effective safety incentive, drug and alcohol prevention, and return to work programs.

Article 7, Section 134 originally went into effect on January 8, 1997, and established both a mandatory safety and loss prevention program for insured employers with high experience ratings and a voluntary safety incentive program for those employers with low experience ratings. Section 134 originally did not include an incentive for the implementation of a drug and alcohol prevention program or a return to work program. The Department of Labor was responsible for administering the mandatory safety and loss program and for certifying consultants who provide the required services. Under the 1997 law, a safety panel was created to approve incentives for the voluntary program, and the Workers' Compensation Board was given responsibility for monitoring the safety incentive program, but these provisions were not implemented.

During the legislative negotiations for the 2007 Workers' Compensation Reform, the stakeholders sought to improve workplace safety and encourage the reemployment of injured workers by creating additional opportunities for employers to receive incentives for implementing safety and health, drug and alcohol prevention, and return to work programs. It was recognized that such efforts would result in cost savings and provide real value to employers, workers, and the workers' compensation system. The stakeholders also transferred the responsibility for overseeing the voluntary program to the Department because of its proven track record in administering the compulsory safety and loss prevention program as well as its expertise in safety incentive programs.

The thresholds established by law for participation in the voluntary and mandatory programs overlap. The mandatory safety and loss prevention program, established by regulation as Industrial Code Rule 59, covers employers with both an experience rating that exceeds 1.20 and an annual payroll exceeding $800,000. Section 134(6-10) of the WCL specifies that the voluntary safety and loss prevention program covers those employers who maintain an experience rating of "under 1.30 for the year preceding and the years in which the credit has been applied for." This section also states that employers who are required to participate in the compulsory program are not eligible for the voluntary program. The Legislature gave the Department the responsibility and authority to draft clarifying language and regulations. The Department, in consultation with the Workers' Compensation Board, set the eligibility threshold for the voluntary program to be those insured employers whose experience modification for the previous year was under 1.30. This decision opens the program up to more employers including smaller employers whose experience rating is above 1.20 but below 1.3 and who are not subject to the mandatory program. This threshold will avoid confusion and clarify the parameters of the program.

The Legislature sought to encourage employers to establish these voluntary programs. According to the State Insurance Department, approximately 77,000 employers have an experience modification factor at or below 1.2 and pay annual workers' compensation premiums of $5,000 or more. Currently, 150 employers actively self-insure and these employers along with their 285 subsidiary companies would be eligible to apply for a reduction in their security deposit. Employers with experience ratings greater than 1.20 represent only 1.7% of the total number of employers in New York State. The pool of eligible employers will be slightly larger than the figures indicate, as the Department decided to make smaller employers that have annual payrolls of less than $800,000 and experience ratings between 1.2 and 1.3 eligible for the incentive in order to maximize the number employers that could choose to have a WSLPIP approved.

The purpose of this Rule is to: outline the procedures, including the application process, that must be followed in order for an employer to receive the Department's approval of a WSLPIP; establish the minimum requirements for an acceptable Safety Incentive Program, Drug and Alcohol Prevention Program and Return to Work Program; and describe the basic educational and/or professional work experience required of an individual to be Certified as a Specialist.

Needs and Benefits: This legislation addresses the needs of employers and employees in reducing the incidence and severity of occupational accidents and illnesses and promotes positive solutions that are universally recognized in safety and loss prevention. Numerous studies have documented how these programs reduce the incidence and cost of workplace accidents or illnesses and help injured workers return to work.

Each day, on average, 9,000 U.S. workers sustain disabling injuries on the job, sixteen workers die from an injury suffered at work, and one-hundred thirty-seven workers die from work-related diseases. The average cost per disabling injury is approximately $34,000. Disabling workplace injuries are estimated to cost employers over $50 billion in direct wage replacement and medical payments annually and generate between $80 billion and $200 billion in indirect costs per year for replacement labor, overtime, lost production and decreased productivity.

According to a report issued by the Superintendent of Insurance in March 2008, while the overall number of claims in New York is decreasing, indemnity and medical costs per claim continue to rise. Overall, indemnity costs comprise 62% of the total workers' compensation claim costs in New York, which is higher than the national average of 55% of total system costs related to indemnity. Programs which focus on ways to reduce the number and severity of workplace injuries and time lost on the job, and which result in safer workplaces, benefit all stakeholders in the system: workers, employers and the State.

There is much data to support the cost-effectiveness of implementing an occupational safety and health program. Safety and health programs help prevent workplace accidents and illnesses and provide direct cost-savings to businesses including lower workers' compensation insurance costs; reduced medical expenditures; less disruption to the normal course of workplace activity; lower costs for job accommodations for injured workers; and less money spent for overtime payments. Safety and health programs also reduce indirect costs because they result in increased productivity, improved morale, better labor-management relations, reduced turnover, and better use of human resources. Employees and their families benefit from workplace safety and health programs because their incomes are protected.

The cost of implementing an accident prevention program is far lower than the cost of accidents. It is estimated that workplaces that establish safety and health management systems can reduce their injury and illness costs by 20 to 40 percent. Studies from the Occupational Safety and Health Administration (OSHA) confirm that incentives for implementing effective worker safety and health programs result in lowered incidents of injury. Employers participating in OSHA's Voluntary Protection Program (VPP) report 51% fewer injury incidences than their respective industry averages.

The economic and human costs of drug and alcohol use are staggering. The National Institutes of Health estimated that alcohol and drug abuse cost the U.S. economy $351 billion in 2006 dollars. Numerous studies, reports and surveys indicate that substance abuse has a profoundly negative effect on the workplace in terms of decreased productivity and increased accidents, absenteeism, turnover, and medical costs. National statistics show that one-third of all workplace deaths have some link to drug or alcohol use. A study published in Occupational Medicine indicated that as many as 40% of fatal workplace accidents and 47% of serious workplace accidents involve alcohol and/or drug use. Drug and alcohol users are three to four times more likely to be involved in workplace accidents, and five times more likely to file a workers' compensation claim.

Workplace substance use and abuse can be prevented. Taking steps to raise awareness among employees about the impact of drug and alcohol abuse on workplace performance, and offering the appropriate assistance to employees in need will improve worker safety and health, lower workers' compensation costs, and increase workplace productivity and market competitiveness. According to the U.S. Department of Labor, for every dollar invested in drug and alcohol prevention programs, often referred to as employee assistance programs (EAPs), employers generally save anywhere from $5 to $16. A study showed that when EAP services were provided work loss was avoided in 60% of cases.

Research has documented the psychological, medical, social and economic effects caused by unnecessarily prolonged work disability and loss of employability. Return to work programs have been shown to reduce the frequency and duration of lost time, workers' compensation costs, medical and indemnity costs, litigation, wage replacement costs, utilization of short term and long term disability benefits, utilization of leave benefits, and worker replacement and productivity costs.

Return to work programs facilitate recovery and lead to less time off work for the worker. A 1995 study demonstrated that employees recover from their injuries three times faster when they are on the job. Furthermore, this data indicated that an employer's return to work efforts can save up to 70 percent in claims costs. Return to work programs also help injured employees maintain their earnings and benefits, such as sick leave and health insurance, and they improve labor relations and employee and supervisor satisfaction.

There are many sources that have documented the key components of these three programs. The Department will provide model programs for an employer's consideration. The Department also will partner with the New York State Office on Alcoholism and Substance Abuse Services to develop sample drug and alcohol prevention programs. Each program implemented will be evaluated to ensure that it contains the proven elements and strategies that will lower workers' compensation and related costs, and justifies approval for the incentive.

Costs: Implementation costs of each WSLPIP option are employer specific and based upon the size and location of the employer. It is anticipated that the cost of implementing any of the options of this legislation will be significantly lower than the cost that employers would incur for employee injuries and illnesses if they did not implement a program.

The cost of the program to employers will be offset by the premium credit or reduction in the security deposit required. The incentives are available to employers on an annual basis as long as an acceptable program is implemented. These programs will also lower the costs to employers of workers' compensation, replacing employees, overtime, and employee turnover.

Local governments that are not self-insured may elect to participate in the program to reduce their workers' compensation premiums. The Department encourages them to consider sharing resources with other nearby local governments in the development and implementation of their programs, thereby reducing the costs of participating in a program.

There are a variety of ways an employer may choose to implement any of the programs in this legislation. The employer has the option to use its own resources to establish a WSLPIP that complies with this Rule, establish a program with the assistance of its insurer, adopt a model program deemed by the Department to comply with this Rule, or use a Specialist or the Department's trained personnel to assist in establishing a WSLPIP that complies with this Rule. Unionized employers may operate a WSLPIP in conjunction with the union that represents their employees. Preexisting programs that meet the criteria established in this Rule are eligible for the Incentive.

An employer must implement a program and the program must undergo a consultation and evaluation by a Specialist or Department staff before the employer applies to the Department for approval. Employers have several options for conducting the consultation and evaluation. This includes seeking the certification of a qualified employee to implement and verify the appropriate program, contracting with a Specialist in the appropriate safety or loss prevention field, consulting with a Specialist employed by the employer's insurance carrier or a representative of the bargaining unit who can evaluate the program, or having a Department staff conduct an evaluation. In most cases, the cost of the consultation and evaluation will be determined by supply and demand.

The New York State Department of Labor's fee for consultation and evaluation services is below statewide rates already in place under the mandatory safety and loss prevention program. The Department proposes to charge $100.00 per hour for consultation and evaluation services for each of the three WSLPIPs. It is anticipated that the review of the Safety Incentive Programs will require several hours of staff time. Consultation and evaluation costs of the Drug and Alcohol Abuse Programs and the Return to Work Programs, as well as the credits given for such programs, are expected to be lower than those of the Safety Incentive Programs; therefore, the Department capped those charges at $300.00 for employers with less than $50,000 in annual premiums. The Department believes that its fees are less than those charged by Specialists/Consultants in the private sector. The Department considered requiring programs to undergo a Consultation and Evaluation either annually or every three years upon renewal, but the Department wanted to lower the cost of the program and determined that it would have enough information from the annual reports and renewal applications to make an accurate assessment as to the worthiness of each program.

As an additional incentive for employers to apply for these credits, the Department proposed an application fee of $100.00, which is discounted to $50.00 for small employers with annual policy premiums of $10,000.00 or less. The fee is waived if the employer chooses to use DOL staff for the consultation and evaluation. The renewal application fee is set at $100.00 and employers with annual policy premiums of $10,000.00 or less are charged a discounted fee of $50 for renewals. The discounts will help small employers in particular. These application fees are below the expected cost of administering this program.

It is imperative that Specialists and Department employees engaged in the consultation and evaluation process have the qualifications necessary to advise employers on their programs. In determining criteria for Specialist certification, the Department considered various education and professional requirements. The Department chose those criteria determined to be the least onerous, while still maintaining the integrity of the program.

In an effort to ensure that there would be an adequate supply of Specialists available to employers, the Department proposed application fees for Specialists that are below DOL's administrative costs. Individuals who wish to be certified as a Specialist in one program area must submit a $100.00 non-refundable application fee, which will be applied to the certification fee of $800.00 if the applicant is approved. Individuals seeking certification in more than one program area would pay a discounted certification fee of $200 for each additional incentive program certification. In order to expand the number of Certified Specialists, Specialists certified for three years in one specialty will receive experience credit toward certification in the second and third specialty.

Fees for members of qualified organizations are discounted to $600 for the first certification. The Department encourages business, labor, insurance and industry groups to serve as qualified organizations. Renewal fees are minimal and scaled to the number of Specialists recertifying. Those currently certified by the Department as Safety and Loss Prevention Consultants under Code Rule 59 will incur no additional costs for certification as a Specialist for the Safety Incentive Program and will incur the same renewal fees as Specialists.

The Department had multiple alternative fee structures for certifying Specialists and opted for a lower fee schedule to minimize costs to those seeking certification, while providing some funds to cover the cost of the program. Costs of certification as a Safety and Loss Management Specialist will be incurred by those wishing to provide the appropriate services as described in this legislation.

The increased administrative costs related to the paperwork for certifying Specialists and collecting fees will require additional resources and staff for the Department's Licensing and Certification Units. In addition, the Department will incur increased costs for sending staff out to provide consultation and evaluation services. The Department foresees that it will need at least 13 additional staff to administer this program.

The Department set fees below its anticipated costs. The Department considered trying to recoup its administrative costs through increased fees, but was concerned that the number of employers who will implement these programs would be reduced.

Local Government Mandate: This regulation relates to a voluntary program and applies to county and local governments who are not self-insured or are members of a self insurance workers' compensation program that requires a security deposit and is monitored under the rules and regulations of the New York State Workers' Compensation Board. Municipal corporations that are exempt from posting a security deposit for their self insurance plans are not affected by this legislation. Approximately 1,500 local governments, such as counties, cities, towns, villages, school districts, fire districts and other special districts and public authorities, do not self-insure and would be eligible to voluntarily participate in this program if their annual premium costs are above $5,000.

Paperwork: This Rule creates reasonable paperwork requirements to ensure compliance and measure quality. The proposed Rule would require that employers develop a written program for any of the options available in the WSLPIP. An evaluation report and written WSLPIP plan must accompany initial applications so that the Department has adequate data to assess whether the WSLPIP approval should be granted. The renewal application and annual reports provide sufficient information for the Department to determine whether the employer's incentive should continue. The employer also must simultaneously send a copy of the application to the employer's workers' compensation insurer, or to the Board if it is self-insured.

Application materials developed by the Department will seek to minimize necessary paperwork. The Department will provide samples of model programs and make them accessible to employers.

Once the WSLPIP is approved, the employer must notify the insurer, or the Workers' Compensation Board if self-insured, and post the certificate of approval at the worksite. Employers must also inform workers of the program and provide program documents to employee representatives, including the recognized collective bargaining representatives where applicable. These provisions involve stakeholders in the program implementation and oversight. The Department also will send copies of the approval notice to the insurer, the Board and the Superintendent of Insurance, but the primary responsibility for notification rests with the employer.

The annual WSLPIP report and reports by insurers will provide data for evaluating and determining compliance by individual programs as well as for measuring the effectiveness of the overall program. The Department will develop report forms that are streamlined to capture relevant data necessary to evaluate the program.

The Department proposes sensible recordkeeping requirements and monitoring procedures. Monitoring is an opportunity for the Department to take a first-hand look at a program and for an employer to receive valuable feedback on its operations. The Department's onsite review is more accurate with the full cooperation of the employer. The Department will conduct the monitoring process in a reasonable manner to ensure that it does not cause undue hardship. However, employers are expected to fully comply with the recordkeeping and reporting requirements of the regulations and to respond cooperatively to the Department's request for information. The Department will look for evidence of compliance, not just the written program or recordkeeping sheets.

The law states that employee representatives must be involved in the programs. The Department believes that the participation of employee representatives in each program is necessary and will ensure that the programs are in compliance with this Rule. The Department requires employers to verify that they have complied with all requirements of these regulations concerning the participation of employee representatives, including the designated employee representatives and the recognized representative of each collective bargaining unit, where applicable.

Insurers are also asked to report annually to the Department and the State Insurance Department concerning the number of employers and the total amount of credits they issue. This data will enable the state to evaluate the program.

Applications to become a Specialist will require the necessary information for determining whether the applicant's qualifications meet the criteria for certification. Applicants will be able to attach pertinent information if necessary. The Department will ensure that the application process is not burdensome.

Duplication: This Rule does not duplicate any current state or federal laws. This Rule revises and expands an existing Rule that was not implemented previously, and seeks to encourage maximum participation by employers.

Alternatives: This Rule provides employers with several alternatives for receiving an incentive. Participation is voluntary. The Safety Incentive Program option addresses key components of a written safety and loss prevention program that are nationally recognized as the basis of an employer's efforts in providing a workplace free from recognized hazards. Option two, the Drug and Alcohol Prevention Program provides for the voluntary implementation of a variety of specifically designed, proven programs used to minimize the incidence and impact of drug and alcohol abuse in the workplace. Option three, the Return to Work Program, provides employers with an effective way to reduce the cost of a workers' compensation injury or illness claim by encouraging safe and timely return to work and by providing alternate forms of transitional employment.

The Department considered a number of alternatives in developing these regulations and carefully weighed the need to use incentives to motivate employers to voluntarily participate in the program with the need to ensure that employers who receive the incentives fully implement an effective program. This balance is attained by requiring employers to have their programs undergo a consultation and evaluation by a Specialist or Department staff prior to initial application, submit an outline of the program and an evaluation report with their application for the incentive, and implement any one or more of the programs prior to receiving an incentive. The components of each of the programs are spelled out in the regulations, but employers are given sufficient latitude to tailor each of the program requirements to their specific needs.

The Department will approve each program for three years; however, employers must submit a short yearly report so that the Department is assured that the program continues to be implemented and can measure the overall effectiveness of the programs. The Department originally considered requiring employers' programs to undergo an annual evaluation by a Specialist or a Department employee but concluded that such an evaluation would be too burdensome and costly. Requiring programs to undergo a consultation and review for the renewal application was considered as well, but the Department concluded that it should receive sufficient information from annual reports and the renewal application to make an informed judgment about the worthiness of the program. The Department also contemplated giving insurers the responsibility for verifying that employer programs continue to be in effect after the first year, but the Department rejected that proposal. Insurers objected to taking on that responsibility since they did not have input during the initial granting of the incentive, and employers were concerned that insurers would deny incentives unreasonably because the insurer had a vested interest in not granting credits.

The Department also took into account the cost and paperwork implications of annual reporting. The Department has determined that in order to ensure that the employer continues to maintain the program and to measure the overall effectiveness of this program that certain basic information should be provided by the employer to the Department. The Department considered simply having employers attest that they continue to implement the approved program, but, given the Department's limited resources to monitor the program, the Department did not believe that employer self-reporting was an effective way to ensure compliance. The Department considered requiring information from both employers and insurance carriers regarding the implementation of each specific WSLPIP, but opted to require reporting from the employer only, so as not to duplicate effort and because the employer could provide a more accurate description of the program's operation.

The Department was required to set fees below its anticipated costs. The Department considered trying to recoup its administrative costs through increased fees, but was concerned that the number of employers who will implement these programs would be reduced.

The Department weighed charging the same certification fees for Specialists as for the Consultants under the mandatory Safety and Loss Prevention Program. The Department lowered the cost of certification of Specialists to ensure that an adequate number of Specialists are available and to encourage employers, unions, and insurers to have their members seek this certification. The Department also considered having only one certification which would have allowed the Specialist to provide consultation and evaluation services for all of the three options, but the Department determined that each WSLPIP option requires distinct expertise and qualifications. The Department lowered the cost and streamlined the application procedures for Specialists who seek certification in more than one specialty.

Federal Standards: There are no federal standards which cover workplace safety incentives under a state-run workers' compensation system.

Compliance Schedule: Employers may implement any of the WSLPIP options immediately and may apply for the incentive upon adoption of these regulations, provided that the application is received by the Department no later than 120 days prior to the end of the employer's policy year, or 120 days prior to the end of the calendar year for self-insured employers. Employers that have implemented any of the three programs prior to this Rule may apply to receive the incentive. The application and renewal procedures provide sufficient time for an employer to implement, arrange for a consultation and evaluation, apply, and receive the credit by the next policy period. Employers will be granted the incentive approval for three years.

To receive the incentive in the second and third year of the approval period, employers must submit required reports at least 90 days before the start of the annual policy date in the second and third year. An employer may seek a renewal of the incentive for another three years, and the renewal application and subsequent reports must be submitted to the Department no later than 90 days before the annual policy renewal date in the third year.

The Department requires insurers to apply each incentive that is granted by the Department and the Superintendent to the employer's next policy renewal period following the date of the Department's approval certificate. Failure to apply the approved incentive within thirty calendar days of the employer's notification to the insurer may subject the insurer to penalties issued by the Superintendent. The Department believes that insurers will have sufficient time to meet this deadline.

Individuals seeking certification as Specialists may apply immediately to the Department upon adoption of these regulations. Applications for certification will be accepted throughout the year and are approved for three years. An individual, who has received certification under the mandatory safety and loss prevention program, Section 59-1.12 of the Labor Law, and has maintained the certification required by the Department, will be deemed qualified to provide the required consultation and evaluation of Safety Incentive Programs under this Rule provided that the individual notifies the Department of his or her intent to perform Specialist services under this Rule.

Effect of Rule: Section 134(6-10) of the Workers' Compensation Law (WCL) was amended in 2007 to restructure the process for providing incentives to employers that implement one or more voluntary safety and loss prevention programs. This Workplace Safety and Loss Prevention Incentive Program (WSLPIP) authorizes premium credits for participating employers whose experience modification rating is under 1.30 and who pay workers' compensation insurance premiums of at least five thousand dollars annually, and authorizes reductions in the required security deposit for participating self-insured employers who pay a security deposit. Section 134(1-5) of the WCL was amended as well. Section 134(1-5) established the mandatory safety and loss prevention program for employers with annual payrolls above $800,000 whose most recent experience rating exceeds the level of 1.20; this program has been overseen by the Department of Labor for over ten years in accordance with Industrial Code Rule 59.

The experience rating thresholds for participation in both the voluntary and mandatory programs overlap; however, the Legislature gave the Department the responsibility and authority to draft clarifying language and regulations. There may be small employers and local governments with an experience rating between 1.20 and 1.30 who are not required to participate in the compulsory program and could be eligible for a WSPLIP credit. In order to maximize the number of eligible small employers, the Department revised its initial proposal and set the threshold for eligibility as those employers with an experience rating of under 1.3 and who are not mandated to have a safety and loss prevention program under Section 134 (1).

Approximately 77,000 employers have premiums of at least $5,000 and experience modification factors at or below 1.20. Currently, 150 employers actively self-insure and these employers along with their 285 subsidiary companies would be eligible to apply for a reduction in their security deposit. Employers with experience ratings greater than 1.20 represent 1.7% of the total number of employers in New York State. Employers with experience ratings above 1.2 and an annual payroll above $800,000 will not qualify for the voluntary safety and loss prevention incentive program because they would be subject to the mandatory program. Employers subject to the mandatory safety and loss program represent a small percentage of employers in New York State. The Department decided to make smaller employers that have annual payrolls of less than $800,000 and experience ratings between 1.2 and 1.3 eligible for the incentive in order to maximize the number employers that could choose to have a WSLPIP approved.

Compliance Requirements: Employers, including small businesses and local governments, may voluntarily implement any one or more of the three options in the WSLPIP. To receive approval for the incentive, the eligible employer must develop and implement a written program that complies with the regulations promulgated by the Commissioner of Labor. The regulations provide guidance and flexibility to enable an employer to adopt a program tailored to its needs. Employers who have existing safety, alcohol and drug prevention, and/or return to work programs that meet the standards set in this Rule may apply immediately for the incentive.

There are many models that meet the standards set forth in the regulations. These models may be easily adapted to the needs of small businesses and local governments.

The Department has developed several model safety programs that have been provided to New York employers through its On-Site Consultation Program and for those employers required to have a safety program under Section 134(1-5). Model drug and alcohol prevention programs that conform to this Rule are being developed in consultation with the New York State Office of Alcoholism and Substance Abuse. A variety of specifically designed, nationally recognized programs used to address the incidence of drug and alcohol abuse in the workplace are available through this New York State agency as well as most federal agencies promoting safety, health or drug prevention programs. There are also many model programs that provide direction for employers who implement a return to work program. They include the necessary changes in company policy, employee notification and forms. Many insurers, including the New York State Insurance Fund, have model return to work programs available for employers. The Department has identified additional return to work programs through its research related to the Department's "Return to Work" report, as issued in March 2008.

An employer must implement the program at each work location prior to applying to the Department of Labor for a WSLPIP credit. Since the employer's incentive will be based on the entire premium paid, the Department requires employers to ensure that the approved program covers each employee.

In addition, prior to applying to the Labor Department for approval for the WSLPIP, the employer's program must undergo a consultation and evaluation by a Certified Specialist or a Department of Labor employee. The evaluation report issued by the Specialist or Department employee verifying that a WSLPIP has been implemented must accompany the application to the Department of Labor. The employer has several options for choosing who will conduct the consultation and evaluation. Employers, including small businesses and local governments, may have the consultation and evaluation conducted by one of their qualified employees who has been certified as a Specialist, or make arrangements with a private sector Specialist, a Specialist representing their insurance carrier or union, or the Department of Labor. This step ensures that the employer will receive an objective assessment of its WSLPIP plan as well as input on improving the program. The evaluation report will enable the Department to make a more accurate and timely decision on granting approval for the WSLPIP incentive.

An employer who chooses to participate in the voluntary program must have its WSLPIP undergo a consultation and evaluation prior to the initial application, and apply to the Department for one or more incentives. Thereafter, an employer must submit an annual WSLPIP report and verification that the program still complies with the regulations in order to receive the incentive for each year of the three year approval period. They must reapply for the incentive after the expiration of each three year approval period. The Department's application and reporting process will be as streamlined as possible, but an employer will be asked to provide sufficient information so that the Department can determine whether the program complies with the regulations and analyze the effectiveness of the program. Insurers and the Workers' Compensation Board are also asked to provide data that the State can use to evaluate the program and to ensure that the appropriate credits are being issued.

An employer must send copies of its application to the Department as well as its insurer or the Board. Furthermore, employers, including small businesses and local governments, must include relevant employee representatives in the consultation and evaluation discussions with the Department or a Specialist. The employer must share their plan documents and certificates of approval issued by the Department with the insurer or the Board, and with employee representatives. This is to ensure that all relevant parties are part of the process and included in the program.

New Certification requirements are outlined for Specialists for each of the three voluntary programs. The Department determined that each specialty required different qualifications, but lowered the cost and simplified the certification process for those seeking more than one Certification. The Department provided an opportunity for the Consultants certified under the mandatory safety and loss prevention program established by WCL Section 134(1-5) to serve as Specialists under the voluntary safety and loss prevention program. The criteria for Certification as Specialists were developed to encourage representatives of employers and organizations such as insurers and unions to seek Certification.

Professional Services: Most employers, including small businesses and local governments, have access to a variety of professional services that address cost containment under the workers' compensation system. The amended Section 134(6-10) of the WCL creates additional options that an employer may choose from to lower costs when implementing an incentive. The employer may seek the certification of a qualified employee to implement and evaluate the appropriate program, contract with a Specialist in the appropriate safety or loss prevention field, have a representative of the employer's insurance carrier provide consultation and evaluation services, or have a Department of Labor employee conduct the consultation and evaluation. In addition, employer groups and employee organizations may have qualified members certified by the Department to perform the required evaluation. To reduce costs to taxpayers, the Department encourages local governments and small employers to consider cooperative arrangements for securing the services of a Specialist who can assist them in developing and implementing their programs. Members of professional organizations are given a discount for certification and re-certification.

Compliance Costs: If the employer uses a Specialist for consultation and evaluation, the cost will be determined by supply and demand. The Department anticipates that most insurers will seek Specialist Certification for staff and such Specialist will provide these services to their customers at little or no cost. The Department decided to lower its fees for consultation and evaluation services, to waive its application fees for employers who use the Department for consultation and evaluation, and to set its application fees below its administrative costs in order to make this program more cost effective for employers. To lower the cost for small employers, the cost of the consultation and evaluation services provided by the Department for the Return to Work Program and the Drug and Alcohol Prevention Program is limited to $300 for employers with annual premium payments of less than $50,000. The consultation and evaluation for the Safety Incentive Program is anticipated to require more hours of work by the Department staff, and, therefore, the Department did not cap that fee. An employer seeking an incentive for more than one program can lower costs by having all programs undergo the consultation and evaluation at the same time. Application fees per program are only $100 with a discount of $50 for employers with annual premiums between $5,000 and $10,000.

Employers will receive a premium credit or a reduction in their security deposit as determined by the Superintendent of Insurance and the Board respectively. These incentives are expected to offset the compliance costs of the programs. Employers with less than five thousand dollars in annual premium and self-insured employers who are not required to submit a security deposit do not qualify for the WSLPIP and will not incur any cost because of this legislation. Employers who do not choose to voluntarily participate in the incentive program will not incur any costs.

Economic and Technological Feasibility: The regulation does not require any use of technology to implement a WSLPIP. The Department will offer, but not mandate, on-line application and reporting. The Department will make every effort to assist small businesses and local governments in their effort to implement and maintain a successful WSLPIP.

Minimizing Adverse Impact: The Department does not anticipate any adverse impact on small businesses created by the implementation of a WSLPIP. To the contrary, the impact of implementing any of the options of this regulation will have a significantly positive effect on small businesses in New York. The Department is working with several agencies such as the New York State Insurance Fund, the Workers' Compensation Board, the Office of Alcoholism and Substance Abuse Services (OASAS) and the Insurance Department to minimize duplication.

The Department sought to increase the attractiveness of the program in several ways. It considered requiring that each WSLPIP receive an annual consultation and evaluation by a Specialist or Department employee, but determined that such a requirement would make the cost of the program prohibitive, especially for small employers and local governments. The Department structured its three year approval process to lower costs for employers while ensuring that approved WSLPIPs continue to comply with the regulations. The Department initially proposed requiring each program to undergo a consultation and evaluation upon renewal every three years, but determined that sufficient information was available through the employer's annual reports and renewal application to enable the Department to render an opinion regarding the employer's continued compliance, thereby minimizing the renewal application costs to employers. Paperwork requirements have been minimized to capture essential data to analyze the effectiveness and maintain the integrity of the program.

The Department lowered the cost of using the Department as a Specialist from the costs charged for the compulsory program. Discounts were established for Specialists seeking Certification in more than one specialty and for members of qualified organizations such as employers, insurers, and unions.

Small Business and Local Government Participation: The Department will seek feedback from small businesses and local governments during the rule making process. Notice of the rulemaking process will be distributed to business organizations and to government entities eligible for the WSLPIP. The Department has posted a notice on the website for employers to make comment. The proposed rule will be posted on the Department website with a reference to the rulemaking provisions in the State Register.

Effect of rule: The Article 7, Section 134(6-10) legislation established a voluntary program that applies to employers 1) whose workers' compensation experience modification rating is under 1.30 and who pay workers' compensation insurance premiums of at least five thousand dollars, or 2) are self-insured and required to pay a security deposit. Under this program, employers who implement a safety incentive program, a drug and alcohol prevention program and/or a return to work program may be eligible for a credit in their workers' compensation premiums or a reduction in their security deposit. Employers in rural areas may choose to participate.

Over 77,000 employers across the state have an experience modification factor at or below 1.2 and pay annual workers' compensation premiums of $5,000 or more and, therefore, are eligible to apply for the incentive; the number of eligible employers operating in rural areas is unknown. Employers with experience ratings greater than 1.20 represent only 1.7% of the total number of employers in New York State. The pool of eligible employers will be slightly larger than the figures indicate, as the Department decided to make smaller employers that have annual payrolls of less than $800,000 and experience ratings between 1.2 and 1.3 eligible for the incentive in order to maximize the number employers that could choose to have a WSLPIP approved. This policy is likely to increase the number of eligible employers in rural areas.

Reporting, recordkeeping and other compliance requirements; and professional services: The compliance requirements for rural employers are the same as for all employers. All employers who choose to implement a Workplace Safety and Loss Prevention Incentive Program (WSLPIP) must first file an application with the Department of Labor to be approved for an incentive. Prior to application, the employer's program shall undergo a consultation and evaluation by a Specialist or a Department employee. An evaluation report and a copy of the written program must be sent to the Department as part of the initial application and for renewal applications. This information will provide the Department with adequate data in order to assess whether the WSLPIP approval should be granted. This process also provides valuable feedback to the employer and will enhance program effectiveness. Employers must send a copy of the application to their insurer or the Board if they are self-insured.

Application materials developed by the Department will seek to minimize necessary paperwork. The Department will provide samples of model programs and make them accessible to employers.

Once the WSLPIP is approved, the employer must notify the insurer, or the Workers' Compensation Board if self-insured, and post the certificate of approval at the worksite. The Department also will send copies of the approval notice to the insurer, the Board and the Superintendent of Insurance, but the primary responsibility for notification rests with the employer.

Employers must also inform workers of the program and provide program documents to employee representatives, including the recognized collective bargaining representatives where applicable. Such provisions ensure the involvement of stakeholders in the implementation and oversight of the program.

Approval for each implemented program shall be extended for three years. In order for the employer to receive an incentive in the second and third year of the approval period, the employer shall submit a basic report to the Department so that the Department can ascertain whether the employer is continuing to implement the program and whether the program has had an impact. The renewal application procedures have been simplified and programs will not be required to undergo a consultation and evaluation upon renewal.

Each employer's annual WSLPIP report and the reports of each insurer will provide data for evaluating and determining compliance by individual programs as well as for measuring the effectiveness of the overall program. The Department will develop report forms that are streamlined and capture relevant data necessary to evaluate the program.

Applications to become a Specialist will require the necessary information for determining whether the applicant's qualifications meet the criteria for certification. Applicants will be able to attach pertinent information if necessary. The Department will design the application form to minimize any burden on the employer.

Costs: There should be no difference between the initial start-up costs of any of the WSLPIPs for an employer in a rural area as compared to one in a non-rural area. Implementation of the incentive programs are expected to lower the costs of employee injuries and illnesses that employers incur. Savings will be generated by reducing the cost of additional labor, overtime and employee turnover; savings will be generated on an annual basis as long as an incentive is implemented. To reduce costs to taxpayers, the Department encourages local governments in rural areas to consider cooperative arrangements for securing the services of a Specialist who can assist them in developing and implementing their plans. Likewise, private sector employers are encouraged to have an employee certified as a Specialist or to enter into cooperative arrangements through employer associations or their insurers to secure the services of a Specialist.

There are a variety of ways an employer may choose to implement any of the programs in this regulation. This includes seeking the certification of a qualified employee to implement and verify the appropriate program, contracting with a Specialist in the appropriate safety or loss prevention field, consulting a Specialist employed by the employer's insurance carrier who can evaluate the program, or having a Department staff conduct an evaluation. Employers also may operate a program in conjunction with the union that represents its employees. In most cases, program costs will be determined by supply and demand.

Implementation costs of each WSLPIP option are employer specific and based upon the size and location of the employer. It is anticipated that the cost of implementing any of the options of this regulation will be significantly lower than the cost that employers without such programs incur for employee injuries and illnesses. Application fees and costs are discounted for smaller employers.

The New York State Department of Labor's fees for consultation and evaluation services are below those statewide rates and usage already in place under the Mandatory Safety and Loss Prevention Program. The Department proposes to charge $100.00 per hour for consultation and evaluation services for each of the three WSLPIPs. It is anticipated that the review of the Safety Incentive Programs will require several hours of staff time. Consultation and evaluation costs of the Drug and Alcohol Prevention Programs and the Return to Work Programs, as well as the credits given for such programs, are expected to be lower than those of the Safety Incentive Programs; therefore, the Department capped those charges at $300.00 for employers with premiums of less than $50,000 annually. The agency believes that its fees will be less than those charged by Specialists/Consultants in the private sector.

As an additional incentive for employers to apply for these credits, the Department proposed an application fee of $100.00, which is discounted to $50.00 for employers with annual policy premiums of $10,000.00 or less. The fee is waived if the employer chooses to use DOL staff for the consultation and evaluation. The renewal application fee is set at $100.00, and employers with annual policy premiums of $10,000.00 or less are charged a discounted fee of $50 for renewals. The discount will benefit small employers who are more likely to have annual premiums of less than $10,000. These application fees are below the expected cost of administering this program.

The Department proposed application fees for Specialists that are below the Department's administrative costs in an effort to ensure that there would be an adequate supply of Specialists available to employers. Individuals who wish to be certified as a Specialist in one program area must submit a $100.00 non-refundable application fee, which will be applied to the certification fee of $800.00 if the applicant is approved. Individuals seeking certification in more than one program area would pay a discounted certification fee of $200 for each additional incentive program certification. Specialists who seek certification in a second or third program area will be given credit for their prior experience as a Specialist, ensuring that an adequate pool of Specialists are available throughout the state and specifically in rural areas.

Costs of certification as a Safety and Loss Management Specialist will be incurred by those wishing to provide the appropriate services as described in this regulation. Renewal fees are minimal and scaled to the number of Specialists recertifying. Those currently certified by the Department as Safety and Loss Prevention Consultants under Code Rule 59 will incur no additional costs for certification as a Specialist for the Safety Incentive Program and will have the same renewal fees as Specialists. The Department had multiple alternative fee structures for certifying Specialists but opted for a lower fee schedule to minimize costs to those seeking certification, while providing some funds to cover the cost of the program.

The Department did not receive additional state funding to administer this program, and is, therefore, concerned that the increased administrative costs related to certifying Specialists and collecting fees will strain the Department's Licensing and Certification Unit resources as well as the one program manager assigned to the unit. The Department considered trying to recoup its administrative costs through increased fees, but determined that would have resulted in a reduction in the number of employers who would implement these programs.

Economic and technological feasibility: The legislation does not require any use of technology to implement a WSLPIP. Applications, report forms and model programs will be available on the Department's website, but on-line submission of paperwork will not be required. The Department will make every effort to assist rural and small employers in their efforts to implement and maintain a successful WSLPIP.

Minimizing adverse impact: There should be no adverse impact on rural areas. It is anticipated that the impact of implementing any of the options of this regulation will have a significant positive effect on rural businesses in New York. The Department is working with several agencies such as the New York State Insurance Fund, the Workers' Compensation Board, the Office of Alcoholism and Substance Abuse Services (OASAS) and the Insurance Department to minimize duplication.

The Department sought to increase the attractiveness of the program in several ways. It considered requiring that each WSLPIP receive an annual consultation and evaluation by a Specialist or Department employee, but determined that would make the cost of the program prohibitive for employers. The Department structured its three-year approval process to lower costs for employers while ensuring that approved WSLPIPs continue to comply with the regulations. The Department also significantly streamlined its renewal process for the incentive. Paperwork requirements have been minimized to capture essential data to analyze the effectiveness and maintain the integrity of the program. The Department lowered the cost of using the Department as a Specialist from those costs charged for the compulsory program. Discounts were established for Specialists seeking Certification in more than one specialty and for members of qualified organizations such as employers, insurers, and unions.

Rural area participation: Public and private interests in rural areas will have the opportunity to participate in the rule making process, public and/or direct notice, public hearings and/or meetings, and adoption or modification of procedural rules to minimize cost or complexity of this regulation. A period of comment will be offered where the Department will solicit feedback on this regulation. The Department will reach out to entities in rural areas during the public comment period.

Nature of impact: This Rule, pursuant to Article 7, Section 134(6-10) legislation, will have a positive effect by retaining and increasing job opportunities. This Workplace Safety and Loss Prevention Incentive Program (WSLPIP) was intended to help New York's businesses reduce costs and maintain a stable workforce, thereby keeping and growing jobs in the state. This Rule will help employers minimize the cost of workers' compensation in New York by providing an annual insurance credit or reduction in the employer's security deposit with the Workers' Compensation Board for the implementation of a WSLPIP. The savings to an employer are expected to be greater than the costs of implementation. These programs will increase productivity and improve the competitiveness of participating employers.

Article 7, Section 134(6-10) will expand the number of individuals seeking certification as Safety and Loss Prevention Specialists, creating more opportunity and jobs. Members of qualified organizations representing employers, labor organizations and insurers may seek certification as Specialists, thus enhancing their qualifications. This legislation creates employment opportunities for safety, health, environmental, drug and alcohol prevention and return to work professionals with qualified experience or professional designations. The legislation will also support the expansion of small businesses that will provide consultative and evaluative services to new and existing clients seeking help with the implementation of a WSLPIP.

The Department received some comments following the May 20, 2009 publication of the Notice of Proposed Rule Making. Following is a summary of those comments and the Department's response.

§ 60-1.2

One stakeholder group commented that the definition of monitoring authority was excessively broad. The definition of monitoring already includes the provision limiting the Department's review to that information required to "determine whether an approved WSLPIP complies with this Part." The Department believes this clearly indicates the extent of the intended monitoring activities.

§ 60-1.4

One stakeholder thought that the $5000 premium minimum threshold for incentive eligibility is discriminatory against small businesses that fall below this threshold. This provision was established by statute and cannot be removed.

One stakeholder thought the regulations should denote how much the Incentive reduction will be and/or the mechanism for calculating the reduction, but the Department of Insurance is responsible for developing the Incentive amounts.

One stakeholder commented that the exclusion of members of a safety group is unfair. Safety groups, which already have programs in place and receive incentives, were excluded from this program by statute.

One stakeholder questioned the experience rating threshold overlap between this rule and the compulsory program under WCL § 134(1). The Department's intent is to maximize the number of employers eligible for the voluntary program by including small employers with experience ratings between 1.20 and 1.30 who are not required to participate in the compulsory program.

§ 60-1.5

One group commented that the Consultation and Evaluation process was overly complicated and unnecessary. While the group understood the requirement for an Evaluation, the group questioned why employers needed to undergo a mandatory process for obtaining recommendations on its program once it had been developed and implemented. The Department originally established this procedure based on the mandatory safety and loss prevention program established by Section 134(1-5) of the WC Law, where employers must undergo a Consultation and Evaluation because of safety problems. The Department agreed that this procedure is unnecessary in the voluntary program, and removed the term "Consultation" from the regulations, as the Evaluation is a form of consultation.

The Department amended language in this Section to say that an employer may use "any individual who is Certified as a Specialist by the Department," instead of listing options, and that "the Department may provide guidance to assist employers" at the suggestion of stakeholders.

§ 60-1.6

Commenters thought that the regulations should allow for electronic forms options. The Department is developing online forms and electronic submission abilities, and added language to allow the Department to develop such processes.

Stakeholders suggested changing the deadline for employers' applications to 180 days prior to policy expiration from 120 days and adding a provision requiring the Department to render decisions on a deadline. The Department believes the current deadlines provide sufficient time for all parties to meet their obligations.

One commenter noted that some employers have multiple FEINs, and wanted it to be clear that separate applications are not needed for programs that cover all locations. The Department added language to clarify the matter.

One group thought the Department should have responsibility for notifying the insurer or the Board when a Certificate of Approval or Renewal is issued. The Department believes such responsibility should rest with the employer who is seeking the discount.

The Department and the Workers' Compensation Board were concerned that self-insured employers would have to forego the credit for another year given the current regulatory timeframe. Language was added to allow existing programs to apply 90 days prior to their policy renewal date for the first year of this Program.

§ 60-1.7

One stakeholder suggested that credits should be available for a limited term of 4 years, because the program should be of sufficient benefit by that time in reducing experience rating and other costs. The Department disagrees and believes that limiting credit eligibility would serve as a disincentive to employers.

One group expressed confusion about the reference to the annual WSLPIP report in this Section. To clarify, the Department switched Section 1.7 - Renewal Application and Approval Procedures with Section 1.8 - Continuation of the Incentive During the Approval Period.

Stakeholders commented that employers should not be required to send a copy of their renewal application to the insurer or the Board, and suggested sending notice of the renewal instead. The Department maintains that this procedure is necessary and will enhance compliance with little burden to the employer.

§ 60-1.8

One stakeholder commented that to receive a continuation of the Safety Incentive, employers should be required to demonstrate a correlation between their Program and a reduction of injury and loss. This information will be available through the annual report required of employers for the Safety Incentive Program [§ 60-1.8(b)(4)].

One group commented that the procedures for submitting an annual report 90 days prior to the policy renewal date is confusing, and would result in an incomplete and partial year report. The Department agreed and changed the language to make the annual report due 90 days after the policy renewal date. The Department changed the language to clarify the data needed for the report.

Commenters suggested the language be amended to say "steps taken to minimize drug and alcohol abuse and related workplace injuries." The Department made this change.

One group believed that the annual report requirement to provide information on "the lost time incurred for each injury" is an overreach, as it would include injuries with minimum amounts of lost time. The Department changed this to require the lost time for each employee participating in the return to work program.

In response to a Stakeholder suggestion, the Department changed language to say “the number of employees who did not return to work after suffering a workplace injury, and the number of employees that could not return to work because of such injury.”

§ 60-1.10

One stakeholder group recommended requiring insurers to report any information that would impact a Program's certification to the Department. Although the insurer has no formal monitoring role laid out in the regulations, the Department welcomes reports related to program compliance.

Stakeholders suggested it would be more appropriate for the provisions covering both initial and renewal applications to be listed separately under Sections 60-1.6 and 60-1.7. The Department believes the provisions for approval, monitoring, and appeal relating to initial and renewal applications are appropriate in this Section.

Commenters thought that this Section should include a time frame for Departmental determinations of deficient applications. The Department does not agree that there should be a time frame for determining deficient applications, as a WSLPIP may become deficient or noncompliant at any point during its operation.

One stakeholder group commented that this section provides no due process provisions. Due process is provided for under Article 78 [§ 60-1.10(c)].

Stakeholders deemed the criterion listed under this section inappropriate for determining denial, revocation, or suspension of an Incentive and that consideration of past violations of State laws or regulations as excessive. The Department maintains that this information is relevant to its review.

§ 60-1.11

One group disagreed that employee representatives should be granted access to personnel, facilities, and records and objected to requiring HIPAA-compliant records access. The Department strongly believes that employees are central to maintaining an effective program and should have appropriate access to information which assists them in their roles. The Department removed the HIPAA reference, but cited conformance with federal and state confidentiality provisions.

The Department rejected the suggested that employers only be required to report change in ownership "that has resulted in issuance of a new federal ID number."

§ 60-1.12

One group was concerned about the time frame for insurers to apply the credit. The Department believes that insurers have sufficient time under the current application deadlines. The regulations also require employers to simultaneously send a copy of the application to the insurer and notify the insurer of an approved credit in a timely manner.

§ 60-1.13

One Stakeholder group objected to requiring employee participation. The Department believes the appointment of a representative of employees is integral to ensuring employee involvement in the program and is required by statute.

§ 60-1.14

Some stakeholders objected to the omission of drug and alcohol testing from this program. It was not the intent of the State Legislature to require drug testing. Although diverse views were expressed in developing the Rule, the Department's intent is for the incentive to be positive and beneficial to both employers and employees, rather than intrusive and burdensome. Fewer employers would participate in a program that required mandatory drug testing.

One group suggested changing the language to read "…use of alcohol and drugs in the workplace or during work hours is prohibited." The Department feels its use of "impairment" covers all situations in which alcohol or drug use would negatively impact the workplace.

§ 60-1.15

One stakeholder was concerned that the cost of reemploying someone with a permanent disability would be significantly more than for a temporary disability injury and commented that a Return to Work Program would be more cost effective if it excluded employees who sustain permanent injuries. The Department responded that a RTW Program must make reasonable efforts to accommodate an employee who is medically able to return to work.

Stakeholders suggested that the policy should be to return the employee to his or her pre-injury employment or accommodate his or her needs, rather than return and accommodate. However, accommodation is a tool used in returning an employee to pre-injury employment as well as other suitable employment.

Commenters said that the use of "treating physician" and "medical provider" interchangeably was confusing. The Department changed the language to read "treating physician" consistently.

One group commented that the Return to Work polices need to take into account the availability of comparable work and suggested adding the language "to the extent practicable." The Department believes the regulation does account for the availability of comparable work by mandating that the employer have a policy, rather than mandating a specific procedure.

Some stakeholders considered the requirement for employers to provide "vocational services" an excessive mandate. The Department believes its use of "vocational services" is broad enough to allow employers to assist an injured employee in obtaining alternative work according to its resources.

One group suggested adding an assessment of employee participation to the evaluation portion of this Section. The Department made this change.

§ 60-1.16

One group commented that the access to employer records and information given to Specialists is excessively broad. The Department believes Specialists must have access to all information required to ensure the WSLPIP is in compliance with this Part.

§ 60-1.17

One group wanted this Section to make clear that any individual, including employees of insurance companies and of employers seeking the incentive, may apply for Certification as a Specialist if they meet the criteria. The Department made this change.

One stakeholder suggested that individuals who were not Certified as a Specialist be allowed to conduct Evaluations under the supervision of a Certified Specialist. The Department expects there to be sufficient numbers of people qualified to obtain Certification to meet the demand for Evaluations and is concerned that Evaluations performed by someone other than a Certified Specialist would be of substandard quality.

Some stakeholders were concerned with how Specialist applicants could document five years of experience for Certification purposes. The Department will evaluate these applicants on a case-by-case basis.

One group proposed deleting the titles of Associate in Loss Control Management and Associate in Risk Management and adding the titles of Certified Loss Control Specialist and Certified Safety Professional. The Department added Certified Loss Control Specialist as a qualifying title under all three Programs.