N.Y. Comp. Codes R. & Regs. Tit. 11 §§ 65-3.19

Current through Register Vol. 46, No. 50, December 11, 2024

Section 65-3.19 - Offsets

(a) State or Federal Workers' Compensation Law benefits that are to be deducted from first-party benefits or additional first-party benefits in accordance with this Part shall not include payments made under any Workers' Compensation Law of the Dominion of Canada or any of its provinces.

(b) Federal social security disability benefits that are to be deducted from first-party or additional first-party benefits shall include, but not be limited to, disability benefits provided for under the Railroad Retirement Act.

(c)

(1) If any source of workers' compensation benefits, or disability benefits under article 9 of the Workers' Compensation Law, denies liability for payment of benefits, in whole or in part, the insurer responsible for the payment of first-party or additional first-party benefits shall pay benefits without deducting the withheld workers' compensation or disability benefits; provided, however, that the applicant executes a prescribed agreement to pursue workers' compensation or New York State disability benefits (NYS form NF-9), which shall obligate the applicant to diligently pursue the claim and to repay first-party benefits equal to the withheld amounts in the event such amounts are eventually paid to the applicant. The insurer is entitled to independent verification of the claim in accordance with this Subpart. If the applicant paid an attorney's fee out of the proceeds of the award, pursuant thereto, the amount of the attorney's fee shall be deducted from the repayment.

(2) The insurer should send a copy of the completed agreement to the local district office of the Workers' Compensation Board nearest the applicant's residence. Thereafter, the Workers' Compensation Board will give the insurer notice of the applicant's hearing, so that the insurer may be present. Although the insurer may not be a party to such hearing, it may submit evidence to the referee and may request that the referee put specific questions to the parties.

(3) If the applicant will not execute the agreement and the automobile insurer is held ultimately liable, such insurer shall not on that account be responsible for the payment of an attorney's fee or interest on the late payment. To the extent that any reimbursement due the insurer is not made by the applicant, the insurer may thereafter deduct such amounts from any future first-party benefits due on the claim.

(d) When it becomes apparent that an applicant, who is receiving no-fault first-party benefits, will be disabled for more than one year, the insurer shall proceed as follows:

(1) forward to the applicant, in triplicate, the prescribed agreement to pursue social security disability benefits (NYS form NF-8) and a self-addressed, stamped return envelope. The applicant shall bring this form to the Social Security Administration (SSA) and, when completed, one copy will be retained by the SSA, one will be retained by the applicant and one will be returned by the applicant to the insurer in the self-addressed, return envelope;

(2) pursuant to the agreement, the insurer shall continue to pay first-party benefits until the applicant begins receiving social security disability benefits.

(3) the insurer, when notified by the Social Security Administration of the amount of the award and the effective date thereof, shall, as of the effective date, reduce the applicant's first-party benefits in an amount equal to the monthly social security disability benefits awarded on account of the applicant's injury, inclusive of awards made to the applicant's spouse and dependents on account of the injury. However, if the applicant paid an attorney's fee out of the proceeds of the award, pursuant thereto, the insurer shall not take credit for that portion of the award in computing the amount of the reduction.

(4) in the event that the applicant fails to execute the agreement, the insurer may, beginning the 27th week after the accident, or 35 calendar days after the agreement was forwarded to the applicant (the extra five calendar days allowed are for mailing) in the event the 27th week has passed, estimate the social security disability benefit it believes the applicant is entitled to on account of the automobile accident and begin reducing the applicant's first-party benefits accordingly. If it is later determined that no such social security disability benefits were due the applicant or that the estimate made by the automobile insurer was too high, the insurer shall pay the applicant for benefits due but shall not on that account be responsible for an attorney's fee or interest on the late payment; and

(5) to the extent that any reimbursement due the insurer pursuant to the agreement is not made by the applicant, the insurer may thereafter deduct such amounts from any future no-fault benefits due on the claim.

(e)Workers' compensation or disability benefits liens reimbursement of section 5102(b)(2) offset.

(1) Whenever a lien is asserted against the proceeds of any tort recovery made pursuant to section 5104 (a) of the Insurance Law for workers' compensation benefits paid pursuant to any other State or Federal law, the no-fault insurer shall make the claimant whole in a manner consistent with the following examples:

(i) Pursuant to section 5102(b)(2), the no-fault insurer takes an offset of $15,000 from first-party benefits due claimant. Claimant recovers $25,000 in an action brought pursuant to section 5104 (a). Workers' compensation lien of $15,000, less the workers' compensation provider's share of expenses and attorney's fees, in the amount of $5,000 is satisfied out of the $25,000 recovery. In order to make the claimant whole, the no-fault insurer shall pay the claimant $10,000 in first-party benefits. The amount owed to the claimant is the net amount of the satisfied lien.

(ii) Pursuant to section 5102 (b)(2), the no-fault insurer takes an offset of $15,000 from first-party benefits due claimant. Claimant recovers $10,000 in an action brought pursuant to section 5104 (a), which is the total amount available to satisfy the judgment or settlement. Workers' compensation lien of $15,000 is compromised to $5,000, less the provider's share of expenses and attorney's fees, in the amount of $2,000 and is satisfied out of the $10,000 recovery. In order to make the claimant whole, the no-fault insurer shall pay the claimant $3,000 in first-party benefits. The amount owed to the claimant by the no-fault insurer is the net amount of the compromised lien, not the full amount of the no-fault insurer's offset.

(iii) Pursuant to section 5102(b)(2), the no-fault insurer takes an offset of $40,000 from first-party benefits due claimant. The workers' compensation provider pays an additional $20,000 in benefits pursuant to the State's Workers' Compensation Law. Claimant recovers $200,000 in an action brought pursuant to section 5104(a). The workers' compensation lien of $60,000 less the provider's share of expenses and attorney's fees is satisfied out of the $200,000 recovery. In order to make the claimant whole, the automobile insurer shall pay the claimant $40,000 in first-party benefits. The amount owed the claimant by the no-fault insurer can never exceed the amount of the section 5102(b)(2) offset taken by the no-fault insurer.

(2) In lieu of the procedure set forth in paragraph (1) of this subdivision, subject to acceptance by the workers' compensation or disability benefits provider, the claimant may assign the payment right to the workers' compensation or disability benefits provider having the lien, as an alternative to the workers' compensation or disability benefits provider obtaining satisfaction of its lien directly from claimant's recovery. The assignment shall be effective only if there has been a recovery made pursuant to section 5104(a) of the Insurance Law. The maximum obligation of the no-fault insurer shall be limited to the amount of the lien which would have been satisfied out of the recovery, but for the assignment and shall, in no event, exceed the amount of the offset taken by the no-fault insurer under section 5102(b)(2) of the Insurance Law. The no fault insurer shall honor such assignment by paying first-party benefits directly to the workers' compensation or disability benefits provider for appropriate credit toward satisfaction of its lien.

(3) Under paragraph (2) of this subdivision, the no-fault insurer shall either pay or deny in whole or in part on the prescribed denial of claim form (NYS form NF-10) within 30 days after submission of proof that the workers' compensation or disability benefits lien has been satisfied or that the provider, as assignee, has effected such recovery.

(4) Under paragraph (3) of this subdivision, the no-fault insurer shall, provided proof of assignment has been received, either pay the workers' compensation or disability benefits provider or deny payment in whole or in part on the prescribed denial of claim form (NYS form NF-10) within 30 days after receipt of proof of recovery by the claimant in an action brought pursuant to section 5104(a) of the Insurance Law.

(5) Failure to make timely payment, as provided for in paragraph (3) or (4) of this subdivision, shall subject the no-fault insurer to the interest, attorney's fees and arbitration provisions of sections 65-3.9 and 65-3.10 of this Subpart and Subpart 65-4 of this Part.

(f)

(1) Whenever an eligible injured person is entitled to disability benefits under article 9 of the Workers' Compensation Law, the insurer shall be entitled to an offset equal to the lesser of:

(i) 50 percent of the applicant's average weekly wage loss not to exceed $170 per week; or

(ii) the actual dollar amount of the disability benefits being received where the employer's plan provides a maximum payment of less than $170 per week. The $170 per week previously referred to shall be adjusted whenever section 204 of the Workers' Compensation Law is amended to provide a higher statutory dollar maximum. The offset shall be applicable during the statutory 26-week benefit period beginning seven days after the accident date except in the case where lower benefits are paid in exchange for a longer benefit period. In no event shall the offset for New York State disability benefits exceed the weekly statutory dollar maximum multiplied by the maximum statutory benefit period (currently $170 * 26 weeks = $4,420).

(2) The insurer shall provide the applicant with a notice and proof of claim for disability benefits (DB 450), which has been printed on buff-colored paper and, in addition, shall notify the applicant's employer that such employer is required to process the applicant's disability benefits claim if its employees are covered for such benefits by the Workers' Compensation Law. The notification to the employer should be sent along with the employer's wage verification report (NYS form NF-6). Unless the insurer has complied with the above, it shall not take an offset for New York State disability benefits until it verifies that the applicant is actually receiving statutory disability benefits.

(3) For all qualified wage continuation plans, (referred to in section 65-3.16[b][1][i] of this Subpart) which provide benefits equal to less than 100 percent of the employee's salary, the insurer should reduce the amount paid under the plan by the amount required to be paid in satisfaction of the New York State Disability Law. Only the excess over the New York State disability benefits is a qualified wage continuation plan benefit.

Example:

A	B
Gross Monthly Earnings	$6,000	$4,000
Monthly Qualified Wage
Continuation
Plan Benefit $3,000
NYS Disability offset -680
Insurer's Qualified Wage
Continuation Plan Offset	-$2,320	-$2,320
Gross Lost Earnings	$3,680	$1,680
First-party Benefit for Loss of
Earnings Limited to Maximum of $2,500	$2,500	$1,680
Less NYS Disability Offset1	680	680
$1,820	$1,000
Less 20% Offset	$ 364	$ 200
Net Loss of Earnings Benefit	$1,456	$ 800

(4) The insurer, when making its first payment for loss of earnings, shall include a written explanation of the computation of the New York State disability offset taken.

Footnotes

¹ If NYS disability benefits are taxable, the offset should be deducted from the lesser of gross lost earnings or $2,500, prior to the 20 percent offset.

N.Y. Comp. Codes R. & Regs. Tit. 11 §§ 65-3.19