Probe Finds N.Y. Paid Prison Inmates Improper Workers’ Comp Benefits

May 7, 2012

An investigation from the New York State comptroller’s office found that the State Insurance Fund improperly paid seven inmates more than $36,000 in workers’ compensation benefits while they were in state prison.

The state comptroller’s office announced its findings last Friday. It also recommended that stronger internal controls and cross-checking data would eliminate improper payments and help cut insurance premium costs for New York businesses.

“Simply stated, inmates serving felony time are not entitled to a dime of workers’ compensation benefits. These payments are indefensible and should have been stopped,” State Comptroller Thomas DiNapoli said.

“The Workers’ Compensation Board owes it to businesses and taxpayers to put stronger internal controls in place. New York state businesses can’t afford to pay higher insurance premiums to cover the cost of these inappropriate payments.”

Workers’ compensation is a state-mandated insurance program that provides compensation to employees who suffer job-related injuries and illnesses. The New York State comptroller’s office noted that inmates serving jail time for felony convictions are not eligible to collect workers’ comp benefits. While the State Insurance Fund is a state agency, it is also the state’s largest workers’ compensation insurance carrier.

DiNapoli said his office cross-checked claimants approved for workers’ comp benefits with the Department of Correction and Community Supervision’s inmate file and reviewed benefit payments made by the state for three years ending September 2011. They found seven inmates were paid more than $36,000 by the State Insurance Fund.

Another 193 inmates may also have been inappropriately compensated, according to the comptroller’s office, but because their benefits are paid by private insurance carriers, DiNapoli’s examiners could not access those payment records.

DiNapoli advised the Workers’ Compensation Board to share information about the 193 inmates with those private insurers so they could identify and recover inappropriate payments. He also recommended that the Board board periodically cross-check benefit recipients with inmate files and that the State Insurance Fund continue its efforts to recover the inappropriate payments.

The full report from the New York State comptroller’s office can be found on the state government’s website.

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