ALBANY, N.Y., July 19 – Workers compensation insurers would no longer be required to contribute to the aggregate trust fund (ATF) under legislation introduced in the Senate.

According to the bills sponsor memo, Chapter 6 of the laws of 2007 made numerous reforms to the Workers Compensation Law. These reforms included increases in benefits for the injured worker, caps to permanent partial benefits, and granting providers with greater control of certain medical testing.

The memo adds that this chapter also increased the use of the ATF. Currently, only private insurers are required to deposit permanent partial disability awards into the ATF. The ATF was intended to be used to encourage the settlement of workers compensation claims. Since only the costs associated with indemnity are paid into the fund and the insurers are still required to pay the claimants medical costs, settlements become excessively complicated, the memo states.

Simply, the expanded use of the ATF will discourage workers compensation settlements, the memo asserts, and since the contribution obligation only applies to private insurers, and not the State Insurance Fund or self-insurers, private insurance companies are placed at a competitive disadvantage when marketing their products.

This legislation intends to repeal the mandatory carrier payment to the ATF for permanent partial disability in order to reduce costs by encouraging settlements and ensure that all workers compensation insurance providers are on a level footing, according to the memo.