Two more self-insured workers’ compensation groups in New York will close over the next several months, bringing the year’s tally to five, as officials continue to enforce stricter financial standards.
The Retail & Wholesale Industry Worker Compensation Self-Insurance Trust, with 23 active and 47 inactive member businesses, and the New York Healthcare Facilities Workers Compensation Self-Insurance Trust, with 71 active and 135 inactive members, will both terminate on July 31, 2006.
The funds are being closed because they are not meeting the requirement that their assets cover at least 90 percent of their liabilities, as is required by the New York Board of Workers Compensation, according to Jon Sullivan, spokesman for the board. They will still be responsible for outstanding claims.
In addition, the Manufacturing Self-Insurance Trust Fund will voluntarily close on Aug. 31 rather than raise its rates.
The closing of these groups follows the shuttering in March of the Provider Agency Trust for Human Services and the Manufacturing Industry Workers Compensation Self-Insurance Trust.
The retail industry trust is managed by Consolidated Risk Services, which also managed the two trust closed in March. Hamilton Wharton manages the healthcare facilities trust and N.Y. Compensation Managers Inc. handles the Manufacturing Self-Insurance trust.
According to Sullivan, self-insured trusts in the state have been under closer scrutiny since 2001 when the WCB adopted stricter financial and claims requirements and began keeping a closer eye on funding levels in all plans.
“The new standards have caused some to reconsider their options,” maintained Sullivan.
He said the board will continue to monitor all groups but does not anticipate a major upheaval.
Employers in the trusts that are closing will now have to seek new coverage, either through private carriers or the New York State Insurance Fund.