Special Funds Liability Under the Board’s Special Funds Group

It has become apparent over the recent years that the New York Workers’ Compensation Board, along with the Special Funds Group, will go to great lengths to resolve themselves of liability for outstanding claims under NY WCL Section 25(a), as well as 15(8), particularly in consequential death claims.

Under the 2007 reforms, the then-Second Injury Fund was closed to new claims with dates of injury on or after July 1, 2007. Then, on March 29, 2013, Section 25(a) was amended to close the Fund for Reopened Cases to new claims where applications are filed after January 1, 2014. Because of this, on any death claim against open 25(a) and/or 15(8) files, the Special Funds Group has resisted liability. Their argument is a compelling one — consequential death claims are new claims and, therefore, under the 2007 reforms and amendment to 25(a), they are not liable and coverage should revert to the original carrier.

Not surprisingly, when this issue was litigated at the hearing level and appealed to the board panel, the board sided with the Special Funds Group and found these to be the liability of the original carrier. After all, the Special Funds Group is essentially an arm of the board (though the Third Department has failed to address this). Thankfully, cases like this were taken to the Third Department and a rational decision was made.

In Verneau v. Consolidated Edison Co. of New York, Inc., the board’s Special Funds Group contested liability where a decedent filed for workers’ compensation benefits after her husband died from asbestosis. Her husband’s original claim was transferred to the Special Funds Group in 2011; the new death claim was filed in March 2017. The Special Funds Group was initially listed as the carrier upon indexing, though the board later changed this to the self-insured employer.

The self-insured employer contested liability, arguing that although this was a new claim, it was consequential to the condition of the claimant’s established workers’ compensation claim. The law judge agreed and indicated that the Special Funds Group was the proper carrier. As expected, the board reversed and imposed liability on the self-insured employer since this was a “new claim” and arose after the January 1, 2014 cutoff date. The Third Department held “where . . . liability for a claim has already been transferred from the carrier to the Special Fund and the employee thereafter dies for reasons causally related to the original claim, the Special Fund remains liable for the claim for death benefits.” The Third Department found the same in Rexford v. Gould Erectors & Riggers, Inc.

This means that carriers and self-insured employers who have claims that have transferred to the Special Funds Group are not responsible for any consequential death claims. While we anticipate the board and/or Special Funds Group will appeal decisions like this to the court of appeals, the precedent as it stands leaves the Special Funds Group as the liable carrier.

Leave a Reply

Next ArticlePaying for Claimants’ Attorney Fees is the Exception to the Rule in D.C.