Working in New York and your “All States Coverage”

Say it isn’t so!!!  Your All States Endorsement may not meet the state requirements!  Failure to meet the requirements of any state can have serious consequences.  In New York State for example, failure to meet their requirements can quickly lead to a $20,000 fine!  This figure isn’t just a scare tactic.  Iv’e seen it time and time again.  Companies often take jobs in the state and fail to notify their agent until they receive the substantial fine, which isn’t easily disputed if you were working in the state!

Let this be a reminder to check or have your agent check the state laws BEFORE going into another jurisdiction!  It could save you a lot of time, money, and heartache!


Working in New York – AS OF MAY 14, 2013


Please check the state website for the most up to date information!!!  INFORMATION IS SUBJECT TO CHANGE AT ANY TIME!


Out-of-state Employers with Employees WORKING in New York State

As part of the 2007 Workers’ Compensation Reform Legislation, Workers’ Compensation Law Section 50(2) was amended to state that when compensation is secured via a stock corporation, mutual corporation or reciprocal insurer authorized to transact the business of workers’ compensation insurance in this state, that such coverage be obtained “through a policy issued under the law of this state.”

On July 12, 2007, Subject Number 046-198 was issued stating that “effective September 9, 2007, all out-of-state employers with employees working in New York State will be required to carry a full statutory New York State workers’ compensation insurance policy.” A full, statutory NYS workers’ compensation insurance policy is one where New York is listed in item 3A on the Information Page of an employer’s workers’ compensation insurance policy.

Thereafter, in September 2007, the Board posted on its website notice that the Board was reviewing the applicability of this provision to out-of-state employers whose employees are attending meetings, seminars, or other minimal activities in New York State. The Board has concluded its review of this matter and now issues the following Out-of-State Employers policy. Insurance carriers, agents, and brokers, as well as out-of-state employers, should carefully review this policy.

Full NY Workers’ Compensation Coverage Required

An out-of-state employer with an individual or individuals working in New York State is required to have a full NYS workers’ compensation insurance policy if that employer (as defined in the WCL) meets ANY of the following criteria:

  • The      employer (as defined in the WCL) is required to register with the NYS      Department of Labor and pay Unemployment Insurance for any period in      question.
  • The      employer has a permanent physical location in New York or has employees      whose primary work location is here.
  • The      employer is operating in New York under a permit, contract, or license      granted by the State of New York, its counties or any municipality as      defined under §57 of the Workers’ Compensation Law.
  • The      employer is working as a contractor/general contractor/subcontractor on a      construction project in New York.
  • In the previous year, the      employer had employees physically in New York for:

at least 40 hours of every week for a period of longer than 2 consecutive weeks; or

had employees present in New York for 25 or more individual days (e.g.- 5 employees working for 5 days in New York equals 25 individual employee days).

Employees traveling through the State not stopping for deliveries, pick-ups, or other work are not deemed to have worked a day here. An employer that has reason to know that it will meet these criteria in the current year, even if it has not done so in the prior year, must obtain the required coverage.

If an out-of-state employer with an individual or individuals working in New York State meets any of the above requirements, NY MUST be listed on Item 3A on the Information Page of an employer’s workers’ compensation insurance policy. This means that the employer is fully covered under the NY Workers’ Compensation Law.

Full NY Workers’ Compensation Coverage NOT Required, 3C Coverage Acceptable

When out-of-state employers send employees into New York for work purposes and a full, statutory NYS workers’ compensation insurance policy is not required, the employer must have such coverage for workers’ compensation as required under the laws of its state, and New York must be listed in item 3C on the Information Page of the employer’s workers’ compensation insurance policy. If the insurance carrier writing the out-of-state employer’s workers’ compensation insurance policy is not authorized by the NYS Insurance Department to write workers’ compensation and employers’ liability coverage in New York, for the 3C coverage to comply with this policy, the insurance carrier must have completed, signed, and filed the Statement of Compliance With Workers’ Compensation Law with the Chair, Form C-105.11.

An out-of-state employer having a new worker’s compensation insurance policy issued after February 1, 2011 by a private insurance carrier not licensed in New York and listing New York under 3C of that policy will not qualify for the specific exemptions set forth in the Out-of-State Employers Policy statement unless the carrier completes, signs, and files the Statement of Compliance With Workers’ Compensation Law with the Chair, Form C-105.11.

The Board will post on its website a list of all carriers that have filed the Statement of Compliance with Workers’ Compensation Law, and will provide periodic updates to such listing.

It may be appropriate to contact your insurance broker, carrier or agent, check with your trade association, or conduct additional research to find the most appropriate insurance coverage for your company. In addition, a New York State workers’ compensation policy may be obtained from the New York State Insurance Fund                         by calling 1-888-875-5790 and a disability benefits insurance policy may be obtained from the New York State Insurance Fund by calling 1-866-697-4332.

List of carriers New York will accept “all states coverage” in section 3C of Workers Compensation Policy.  If your carrier is NOT on this list, you could ask the underwriter if the carrier could apply to get on the approved list.


Ascertaining Violations of the Law

The Workers’ Compensation Board may require an employer to furnish proof that the employer:

  • Has a      valid workers’ compensation insurance policy;
  • Is      self-insured for workers’ compensation; or
  • Is      legally exempt from having to obtain workers’ compensation coverage,      and/or
  • Is      keeping proper, accurate business records.

If an employer fails to provide this information within 10 days following the Board’s request, under the WCL the Board is required to assume that the employer is violating the WCL. (WCL §52 [3])

Personal Accountability

The sole proprietor, partners or the president, secretary and treasurer of a corporation are personally liable for a business’ failure to secure workers’ compensation insurance.

Liability for Claims Incurred by an Uninsured Employer

Section 26-a says an employer is liable for a penalty of $2,000 per 10-day period of noncompliance, plus the actual award (including both compensation and medical costs), plus any other penalties the Board assesses for noncompliance. In cases involving severely injured employees, the medical costs alone could be in the hundreds of thousands of dollars per injury.



Obtaining coverage through the New York State Insurance Fund:  (Please note there is NO COMMISSION PAYABLE to the agent if you use the NYSIF)


Request a quote:


Request a quote for Disability Benefits (also required under NY Law)


Requesting a Quote for NYSIF Workers’ Compensation Insurance

You may request a NYSIF quote to apply for workers’ compensation insurance by using NYSIF eQuote. First, you have to create an online account, then provide the following information:

  1. Requested      effective date of insurance;
  2. Full      name(s) of employer(s) including trade name(s) or doing business as      name(s);
  3. Employer(s)      main NYS work location, county, mailing address;
  4. Name      and address of insurance representative;
  5. How      long has your client been in business?
  6. Has      client ever been insured for workers’ compensation?
  7. Client’s      latest experience modification factor and the effective rating date, if      known;
  8. Has      client been declined for coverage in the past 12 months?
  9. Has      client ever been insured with NYSIF?
  10. Describe      client’s operations including products/services;
  11. List      client’s estimated annual payroll by type of work and duties for all      employees.

In most instances, a premium quote will be returned within three business days.

What “payrolls” do I need to report for a work comp audit?

profit-loss-statement Insurance companies and their auditors are very specific with regards to the payrolls that can and can’t be included in a workers’ compensation policy as “remuneration”

The following list is taken from the Basic Manual 2001 Edition (latest manual at the time of this post) from (National Council on Compensation Insurance, Inc.  If your state is not subject to NCCI, you may have some variations from this list.  Please check with your state authority for what the specifics are if you’re not operating in an NCCI jurisdiction.


Basic Manual 2001 Edition

Rule 2- Premium Basis and Payroll Allocation

B. Payroll

For the purposes of this payroll means money or substitutes for money.

1. Includes:

(Additional Rules: ME, MT, UT) (Exceptions: AK, AR, CO, IL, IN, KS, KY, MD, MS, MT, NM, NV, OK, OR, SD, TN, VA)

a. Wages or salary (including retroactive wages or salaries)

b. Total cash received by an employee for commissions and draws against commissions.

c. Bonuses including stock bonus plans.

d.Extra pay for overtime work except as provided in Rule 2-D-3

e. Pay for holidays, vacations, or periods of sickness.

f. Payment by an employer of amounts that would have been withheld from employees to meet statutory obligations for insurance or pension plans such as the Federal Social Security Act or Medicare.

g. Payment to employees on any basis other than time worked, such as piecework, profit sharing or incentive plans.

h. Payment or allowances for hand tools or hand-held power tools used by employees in their work or operations for the insured. These tools may be supplied directly by the employee or to the employee through a third party.

i.  The rental value of an apartment or house provided to an employee based on comparable accommodations.

j.  The value of lodging, other than an apartment or house received by an employee as part of their pay to the extent shown in the insured’s records.

k.  The value of meals received by employees as part of their pay to the extent shown in the insured’s records.

l.  The value of store certificates, merchandise, credits or any other substitute for money received by employees as part of their pay.

m.  Payments for salary reduction, employee savings plans, retirement or cafeteria plans (IRC 125) that are made through employee-authorized salary reduction from the employee’s gross pay.

n. Davis-Bacon wages or wages from a similar prevailing wage law.

o. Annuity plans.

p. Expense reimbursements to employees to the extent that an employer’s records do not confirm that the expense was incurred as a valid business expense.

q. Payments for filming or commercials excluding subsequent residuals that are earned by the commercial’s participants each time the commercial appears in print or is broadcast.


Check your state requirements to see the exemptions in your state.  As you can see, the list of included remuneration is comprehensive!



New Experience MOD changes in effect for Maryland

Marylanders with effective dates of January and February are receiving their new experience MOD’s.  Have you seen a big jump or drop in your rating based on your history?

Share your results!

So far I’ve seen a mixed bag.  Some mod sheets have remained unchanged, others have seen a significant increase.  The biggest surprise I think for some is the retroactive date of the increased split point for all years, not just the most recent year on the MOD sheet.

What does that mean?

If the last year of data on your experience MOD was Jan. 1, 2009 to Jan 1, 2010 and you had three claims that year that were:




On your 2012 EMR, each of those claims the primary split point was set at $5,000.  Under the changes, the split point for all three of those claims is now $10,000.  This will have a significant impact on your EMR.

If it’s not making sense, give your agent a call.  If you’re still not clear, send an email or give me a call. Good luck!


Have you seen your WC rates rise?

Agents and carriers alike are sharing their stories of rapid price increases and what those in the industry refer to as a hardening of the market.  If you haven’t been paying much attention to your workers’ comp losses and experience rating, it’s not too late.  Mistakes and inaction from the past will likely haunt you for the years to come, but it doesn’t mean you shouldn’t start doing something about it now!  Reach out and talk to your agent about what you can do to make your firm more marketable for the next renewal!


I never received my MOD Worksheet?

I’ve been getting this question a lot lately.  Primarily because NCCI stopped mailing the MOD Worksheets like they used to!

NCCI was mailing a letter providing a link with a username and password to access your experience MOD Worksheet.

If you didn’t receive this letter or can’t find it and want your worksheet (which if you’re here, I hope you want a copy of your worksheet!), you can email right from their website at

Or Call at 1-800-NCCI-123

NCCI will send the MOD Worksheet to you at no charge if you haven’t received it previously.  They will likely ask for an email as well so they can transition away from faxing and mailing the worksheets.


Follow us on Twitter

Jason Rilley @ManageYourMOD

Yes, I’m late to the party with a Twitter account and I haven’t quite found a good way to post a quick link for you to follow right from the site, but I wanted to get the word out there none the less.





Check my MOD sheet in only 3 steps

So you want to check your MOD Sheet?  Good for you!  You should!

How to quickly check your NCCI Experience MOD Worksheet for accuracy.

Assuming you know the basics of reading your MOD Sheet, if you don’t, please check out MOD Sheet 101, you understand the basic data that goes into the calculation.

You can quickly glance over your experience MOD worksheet and come up with an idea on how accurate it is in just ten minutes.

  1. Glance at the classcodes and payrolls.  Does anything jump out at you?  A classcode you don’t recognize, a year with lower than payrolls that what you’d expect?
  2. Check the claims section. Do you see any losses that look too large or don’t recognize at all?  Is there a small claim that isn’t an injury code 6 for this in ERA states?
  3. Do you have all of the years reported?  How about wrap ups or Owner Controlled Insurance Programs?

A quick check of these three items and you’ll know if you more detail is needed!  You’re still encouraged to talk to your agent or consultant to verify the data and calculation, but this quick check highlights the most commonly found errors in the experience rating!


15 Warning Signs of Workers’ Compensation Fraud

For most business owners and risk managers, your gut can tell you pretty quickly when an injury just doesn’t seem right.  If you’re new to workers’ compensation, this guide provided by Zywave, Inc*. gives some insight into situations you may want to discuss with your agent or claims adjuster.


The WC (workers’ compensation) insurance system is a no-fault method of paying workers for medical expenses and wage losses due to on-the-job injuries. While the majority of WC claims are truthful, the National Insurance Crime Bureau reports that billions of dollars of false claims are submitted each year. To help you detect possible WC fraud, experience shows a claim may be fraudulent if two or more of the following factors are present:

1.  Monday Morning:  The alleged injury occurs either “first thing Monday morning,” or late on a Friday afternoon but not reported until Monday.

2.  Employment Change:  The reported accident occurs immediately before or after a strike, a layoff, the end of a big project or at the conclusion of seasonal work.

3.  Job Termination:  If an employee files a post-termination claim:

–   Was the alleged injury reported by the employee prior to termination?

–   Did the employee exhaust his/her unemployment benefits prior to claiming workers’ compensation benefits?

4.   History of Changes:  The claimant has a history of frequently changing physicians, addresses and places of employment.

5.  Medical History:  The employee has a pre-existing medical condition that is similar to the alleged work injury.

6.  No Witnesses:  The accident has no witnesses, and the employee’s own description does not logically support the cause of injury.

7.  Conflicting Descriptions:  The employee’s description of the accident conflicts with the medical history or First Report of Injury.

8.  History of Claims:  The claimant has a history of numerous suspicious or litigated claims.

9.  Treatment is Refused:  The claimant refuses a diagnostic procedure to confirm the nature or extent of an injury.

10.  Late Reporting:  The employee delays reporting the claim without a reasonable explanation.

11.  Hard to Reach:  You have difficulty contacting a claimant at home, when he/she is allegedly disabled.

12.  Moonlighting:  Does the employee have another paying job or do volunteer work?

13.  Unusual Coincidence:  There is an unusual coincidence between the employee’s alleged date of injury and his/her need for personal time off.

14.  Financial Problems:  The employee has tried to borrow money from co-workers or the company, or requested pay advances.

15.  Hobbies:  The employee has a hobby that could cause an injury similar to the alleged work injury.

Remember, these warning signs are simply indicators. If you are suspicious of a claim, alert your insurance carrier.

Content © 2007-2010 Zywave, Inc. All rights reserved.


*For agents not familiar with Zywave, ( be sure to check them out!  They provide one of the most comprehensive solutions for insurance agencies, delivering the tools and capabilities to differentiate yourself from the competition.

Zywave Vision Statement:

Zywave’s leading technology solutions are used by more than 6,000 insurance and financial services firms around the world to differentiate from the competition, enhance client services, improve efficiencies and achieve organic growth.

Reading Your MOD Sheet 101

How do I read my NCCI Experience MOD?

You just received your MOD sheet and maybe it’s up, maybe it’s down, or maybe it didn’t change at all.  Just about everyone knows where to find the final rating, but since this post is MOD Sheet 101, I’ve shown an illustration below.


Whatever the final number, you want to understand a few key pieces of information from the experience rating worksheet.

Regardless of good or bad, we’re only trying to determine now, what information are they using to determine my rating.  Since I’m only going into the basics of the MOD in this post, we’re not going to look at the details like primary losses, ballast values, etc.

First, what policy years are they referring to?  Your experience MOD typically reflects three policy years worth of data.  There will be times when your MOD sheet will have more than three years worth of data (you changed your renewal date, acquired another company, involved in an OCIP or wrap-up, and more, but this is only an intro into reading the MOD).

Let’s start from the top down!

1. Each of the states you had payroll in should be listed for each year you had payroll in that state.  Rules vary from state to state.  If you have a questions with states and classifications, please ask as there are too many variables to summarize!

2. The next section you’ll see is the classcode and the corresponding payrolls.  (Yes, skipped ELR and D-Ratio)

3. The next section is claim data (or claim number), the Injury Code, and weather or not the claim is open or closed.  (Yes, for the sake of simplicity we’re skipping the expected losses and expected primary losses)

Claim Data: This is your claim number.

Injury Code: Your options here are 1-9

1= Death

2= Permanent Total Disability

3= Major Permanent Partial Disability

4= Minor Permanent Partial Disability

5= Temporary Total or Temporary Partial Disability

6= Medical Only

7= Contract Medical or Hospital Allowed

8= Compromised Death (California Only)

9= Permanent Partial Disability

O F: Quite simply, this column shows if the claim is OPEN or CLOSED.  WAIT!!!  My example has an asterisk!!!!  Yes, the asterisk as shown in the example means you had multiple small claims with the same injury code.  (At the time of this writing a “small” claim is any claim under $5,000.  The rules are changing here with regards to what defines a small claim, but for now, anything under $5,000 is small).  You’ll also see that because there are multiple claims here, the number of claims are listed in the Claim Data section rather than a claim number.  In this instance, there were two small claims and the total for both small claims was $1,459.

ERA States

An ERA State?

A key feature with the experience MOD calculation as well as when employers and risk managers try to determine the cost benefit for return to work and light duty programs is weather or not the state in question has approved and Experienced Rating Adjustment (ERA).  So what is an Experienced Rating Adjustment?

Quite simply, if a state has approved ERA Status, and a workers’ compensation claim is considered “medical-only”, when NCCI calculates your experience MOD, claims which are medical only recieve a 70% reduction when calculating the claim information.  How do you know if a claim is medical only per your MOD Sheet?  Check the IJ (Injury Code) number.  An injury code 6 means the claim is medical only.

So why would NCCI give me a 70% discount on a claim just because it’s medical only?  There are several reasons, but I’ll give you two of the biggest.

By giving a discount for smaller claims (typically those smaller claims are medical only), employers are encouraged to report small claims rather than pay them in house as many do.  In order for the EMR to be as accurate as possible, NCCI has to receive as much claim data as possible.  When claims are paid in house, all legalities aside, the factors used to determine the Discount Ratio (D-Ratio) and Expected Loss Rates (ELR), aren’t as accurate because they aren’t receiving all of the data.  Don’t get me wrong, the actuaries understand not every claim gets turned in and they account for this, but by encouraging companies to submit even the small claims, it helps the accuracy of the calculations.

Why not reward the employers whose employees, when injured, are back to work and returned to full productivity without any indemnity payments or lost work time?  It makes sense to reward those employers who put employee safety as a priority!

You understand what the ERA is, and how it can help your MOD rating, but which states DON”T give an Experience Rating Adjustment?
While I do check the regulatory authorities on the states below prior to posting, things can and do change.  For several of the states that don’t currently allow ERA, many are reviewing, but have not yet adopted.  If you regularily work in one of these states and discover a change before I do, please share so I can verify and update!

Alaska (Pending, but not yet approved)








New Jersey

New Mexico

New York







You can't manage what you don't understand.