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Legislative Memo

Lev Ginsburg
Director of Government Affairs
T 518.465.7511
www.bcnys.org

BILL:

S.6405/A.9005, Part G, Section 8

Support

SUBJECT:

Imposition of Penalties for “Frivolous Appeals”

 

DATE:

February 1, 2016

 

The Business Council strongly opposes the Governor's proposal to impose new penalties on employers and carriers who appeal for modification or rescission of a decision on “frivolous grounds”, as found in S.6405/A.9005, Part G, Section 8.

These imposition of a penalty of 20% of unpaid compensation plus a $50 assessment to the Workers’ Compensation Board is an excessive penalty that will not only increase the cost of compensation insurance to New York’s employers but will likely stymie many valid appeals of decisions by commercial carriers and employers alike.

The provision fails to define “frivolous grounds” and thus leaves employers, carriers and attorneys exposed to large penalties every time they appeal a decision. When taken in light of the provisions of S.6405/A.9005, Part G, Section 20, where the Governor’s proposal seeks to both decrease the number of Board Commissioners and give the authorization to staff attorneys to decide uncontroverted cases, we have significant concern that a single individual, with no statutory guidance, can decide whether or not any appeal is frivolous, resulting in inconsistent and likely unfair application of this standard. 

This provision in essence allows for situation where an employer or insurer must worry about any and every appeal costing an extra 20% of the underlying claim. This will serve as a disincentive to all appeals regardless of their merit. With significant increases in the cost of workers’ comp coverage, New York State employers should not be subject to significant new penalties addressing legitimate coverage concerns.

For these reasons, The Business Council strongly opposes this proposal, and urges its rejection by the Senate and Assembly.