New York Border Wars?

November 5th, 2007 by

We have been tracking the new insurance requirements in New York (blogs here and here). It is no longer sufficient for out of state comp policies to list New York under “other states” coverage (section 3C). If employees from out of state want to work in the Empire State, New York must be listed specifically under 3A of the policy. That is a huge logistical problem, especially for the states bordering New York, where employees routinely cross state lines in the course of doing business. It’s an even bigger problem for out-of-state carriers who lack a New York license. They cannot list New York on their policies.
The Governor’s office has been working with the Workers Comp board to clarify the requirements. Well, that’s what they say they’ve been doing, but all the Insider sees are increasingly muddied waters. At this point, insurers and agents are basically on their own. If they have a specific question about where coverage is required, they can write to the board. The Board will try to provide an answer, but the answer itself will not be published to benefit others. In other words, each case will be reviewed on its merits. Kind of like the way New York manages comp claims, with heavy-handed judicial review for every tiny step in the process. It’s cumbersome, it’s expensive and it’s remarkably ineffective. At this point the state seems to be conveying a New York-style message to out-of-state carriers, agents and businesses: “If you don’t like it, work somewhere else!”
A Modest (Legislative) Proposal
Attempts to stir up New York employers (and unions) to support their colleages in other states have failed dramatically. New York employers see this as someone else’s problem. So here’s a modest proposal: let’s take up the legislative cudgel in New Jersey, Pennsylvania, Vermont, Massachusetts and Connecticut. Each of these states can pass a law requiring that all New York companies doing business in the states name them in Section 3A of their comp policies. Call it “tit for tat.” I suspect that once New York employers (and their carriers) feel the heat and the unreasonableness of this requirment, they will lobby for changes in the proverbial “New York minute.”
In the meantime, new Board Chair Zach Weiss will have his hands full. His office is about to be bombarded with requests for clarification from carriers and employers around the country. He didn’t write the law, but he is now responsible for implementing it. Good luck to him and to everyone else stuck with the consequences of this well intentioned but ill-conceived law.