New York State Governor Kathy Hochul has signed legislation restoring the ability of thousands of New York businesses to access low-cost workers’ compensation coverage through the New York State Insurance Fund(NYSIF).
NYSIF is New York’s largest workers’ compensation insurer and a centerpiece of the State’s low-cost insurance market.
“At the height of the COVID-19 pandemic, thousands of New York businesses struggling to stay afloat lost access to affordable workers’ compensation coverage when they needed it most,” Governor Hochul said in Friday’s announcement.
She added that the bill ensures continued employer protection for workers with affordable coverage while addressing any back premium, and said the bill would save businesses across the state “millions of dollars in premium and helping their bottom line.”
New York law requires businesses to secure workers’ compensation coverage, which most obtain through NYSIF or a private insurer. But unlike private insurers, NYSIF insures any employer that applies for coverage regardless of risk at the lowest possible cost to maintain a solvent fund. NYSIF may only cancel a policy for non-payment of premium and until now was precluded from re-issuing a policy to a business that owed it premium.
The new law will enable NYSIF to issue a policy to a business with an outstanding balance, allowing the company to pay the owed premium under an installment plan. In doing so, the legislation will give more than 3,000 New York businesses renewed access to the largest segment of the low-cost insurance market, generating an aggregate of $8 million in potential premium savings, or an average of approximately $2,000 per policyholder.
State Senator Jessica Ramos, a co-sponsor of the measure, noted that bills “stacked up” for small businesses during the pandemic. “Even though the enacted budget included meaningful measures to allow them to regain revenue, they need more support to get back on their feet, she said.
Bill co-sponsor Assembly Member Nathalia Fernandez said the bill was intended to provide “credible solutions to coverage, recovery, and opportunity” for New Yorkers who were “forced to close their businesses and are struggling to get back on their feet.
“With the signing of this piece of legislation, business owners can now start a new insurance policy while paying back their previous policy,” Fernandez explained.
“This is not only a success for our small business owners, but a success in the battle for the people to dismantle the walls and barriers that are holding back New Yorkers from success, as well as social and economic mobility.”
Under the new law, policyholders can work with NYSIF to establish a payment plan for both the outstanding balance and premium on the new policy. All companies must also meet NYSIF’s general underwriting standards.