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Is There A Limit To The Liability Of Self-Insured New York Employers?

Workers’ compensation coverage is one of many operating expenses that can eat into a business’s profit margins. The more employees a company has, the more they will pay for coverage. For as long as a company has paid staff, it will typically need to retain workers’ compensation coverage, which can feel like throwing away money, especially if a company operates in a lower-risk industry.

Eventually, organizations in New York may qualify to self-insure. Instead of continuing to pay a premium for coverage, they can instead self-insure based on the business’s financial status, current revenue levels and business rating. Self-insurance can theoretically save thousands by eliminating workers’ compensation premiums, but the downside is that the company will have to absorb all of the expenses if a worker makes a successful claim.

Workers’ compensation claims can lead to very large payouts

There are numerous rules that limit how long people can received disability and medical coverage and also what costs are eligible for coverage. Disability benefits, for example, typically only persist until someone can return to work and will only replace a portion of their lost income, not their full weekly paycheck.

Medical benefits are usually comprehensive, which means that the worker doesn’t have any patient responsibility costs. However, medical coverage will end when a worker becomes non-compliant with medical instructions, no longer has any symptoms or achieves maximum medical improvement (MMI) for their condition. Although the state does cap disability benefits, there is no set amount for medical coverage. The medical coverage required by the employee could amount to tens or even hundreds of thousands of dollars before they fully recover or become ineligible for future medical benefits.

Proper claim management is key to financial stability

When an organization self-insures in New York, a single worker claim could be enough to do major financial damage to the company. Rather than simply paying the claim in full without any plan, the business may need to review the situation carefully to ensure it minimizes losses while remaining compliant with New York state statutes.

Consulting with a lawyer familiar with New York’s complicated workers’ compensation rules may benefit organizations that are hoping to keep their annual operating budgets balanced after a worker reports an injury or a diagnosis of a job-related medical condition.

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