New York Workers’ Compensation Board Issues Statement On Processing of Disability Benefits Insurance Policy Cancellations

Albany, NY (CompNewsNetwork) - The New York Workers' Compensation Board has issued a Disability Benefits Insurance Contract Bulletin. All carriers must comply with the requirements of Workers' Compensation Law §226(5) when canceling a NYS Disability Benefits insurance policy. The law requires ten days notice to the employer and the Workers' Compensation Board when cancellation is due to non-payment of premium and thirty days notice to both when cancellation is for any other reason. If carriers do not strictly adhere to these requirements, a workers' compensation law judge may deem the policy active for any resulting lapse in coverage by the employer.

Existing Processing Procedure
It has been the practice of the Workers' Compensation Board to reject and return cancellations to the carrier when timely filing notice has not been given to either the employer or the Board. The carrier was then required to resubmit the cancellation with new cancellation dates to meet the requirements of the law and to record the cancellation in the Board's Insurance Compliance computer system.

New Processing Procedure
The Board requires all statutory NYS Disability Benefits proof of coverage be filed electronically. Since implementing the initiative for electronic filings, the Board has worked continuously to improve the efficiency and effectiveness of our Insurance Compliance System by progressing towards full automation of all disability benefits proof of coverage transactions for statutory coverage.

Effective April 25th, 2008, the Workers' Compensation Board will no longer reject untimely cancellation transactions regardless of the time between the notice and date of cancellation. However insurance carriers are still required to comply with the timely filing notice requirements in Workers' Compensation Law §226(5). Even though the Board will record the submitted cancellation date in its Insurance Compliance System, this will not preclude a finding by the Board or a judge in a disability benefit's claim that the policy was improperly canceled because the timely filing requirements of §226(5) were not met. Assuming all other required information is properly submitted, carriers will continue to receive an electronic confirmation, via an acknowledgment file, indicating that the cancellation transaction was processed.

The receipt of an acknowledgment file does not represent a timely Proof of Coverage filing.

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