The shaky New York workers' compensation group self-insured trusts (GSITs) financial woes have grown exponentially in magnitude within the workers’ compensation market like the national sub-prime mortgage debacle. And injured workers are at immediate risk!
You may recall that the former Governor Eliot Spitzer issued a budget amendment for $55 million in bonds to cover the then estimated liabilities to injured workers of failed GSITs. Subsequently, Workers' Compensation Board (WCB) Chairman Zachary Weiss ordered, pursuant to law, assessments against remaining GSITs to pay for those liabilities. By then, the liabilities were measured at $78 to $80 million by the WCB. Some are now estimating that the number will approach $100 million as other GSITs are reviewed for financial stability.
Worse, the word on the street in Albany indicate that the Workers' Compensation Board's ability to meet indemnity and medical obligations to thousands of injured workers will be exhausted in as little as three months.
Who and how will those injured workers be protected? Who will pay their mortgages? Will they suffer in pain without necessary treatment and prescriptions? Will their once temporary disabilities become permanent and career ending?
First Cardinal, a Third Party Administrator for a collection of GSITs, secured an injunction against Weiss in assessing the liabilities. Ironically, the injunction permitted the assessments to support the Board’s operations while staying those assessments that were intended to pay for injured workers. That injunction has now been appealed and we await the outcome. In addition, the New York Ste AFL-CIO is attempting to intervene as an interested party to protect their membership from this potential catastrophe.
Albany legislators need to pay attention to this dangerous crisis. If they can appropriate funds for the Baseball Hall of Fame ($500,000), they should protect the thousands of injured workers who vote in their districts?
A reading of the WCB Memorandum of Law in support of its assessments indicates that WCB Chairman Zachary “Trust-buster” Weiss has correctly read the statutes and and is acting to protect injured workers pursuant to the 2007 reforms concerning the authority of the WCB over the GSITs. Chairman Weiss is to be applauded for confronting this issue with vigor and protecting the benefits of injured workers. Bully!
Stay tuned for future developments.