Workers comp trusts get $370 million bailout from New York State
January 2, 2014 Published in Firm News
Too many in Sangamon County believe that if they’re injured on the job, resolving any workers’ compensation issues will be a breeze. What they often fail to realize is that workers compensation funds are like any other insurance company; they don’t stay in business by paying out claims. Yet even with disputes over payouts, many private workers compensation funds find difficulties in paying out claims to the employees of clients that carry coverage through them.
More and more companies have recently chosen to go with new self insurance trust for their workers compensation coverage. These trusts market themselves to multiple companies as a way to reduce premium costs by pooling the resources of all of the companies that participate in the trust and paying out claims to the employees of those companies from those funds. Yet many of these self insurance trusts have failed to meet payment obligations across the country in recent years, often to the point of needing to turn to the Workers Compensation Boards in their respective states for assistance.
New York State recently sold over $370 million in bonds to help meet the payments due from 23 of these failed insurance trusts that have back payments due to their clients’ employees from as far back as 2007. The state is now paying out those claims while at the same time initiating legal action against those trusts to recuperate the money currently being paid out.
As one can see, there are any number of ways for an employer’s workers compensation plan to fail in paying for the medical expenses accrued after a workplace injury. Even in such cases as the source of the employer’s workers’ compensation resources facing financial insolvency, one may wish to retain an attorney to ensure that his or her claim is addressed if and when assistance is made available.
Source: Syracuse.com “State sells $370 million in bonds to resolve workers compensation claims” Rick Moriarty, Dec. 20, 2013