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New York State
Workers' Compensation Board
OFFICE OF THE CHAIR
20 Park Street   Albany, New York 12207
Governor David A. Paterson


Subject No. 046-365

Carrier Performance Standard For Waiving Proof of Coverage Penalties

Date: October 5, 2009

To:  Workers' Compensation Carriers and the New York State Insurance Fund

The need to submit timely proof of coverage (POC) transactions to the Board cannot be overstated. In addition to playing a critical role in the Board's compliance efforts, timely POC transactions also help ensure that the proper carrier is placed on notice in claims filed with the Board. Placing the correct carrier on notice saves time and money for all parties concerned.

The Board recognizes that some proof of coverage delays will always occur. As such, in the spirit of cooperation, the Board does not want to penalize a carrier with an excellent POC timeliness record for occasional delays. Therefore, the Board is establishing a carrier performance standard for timely filing of POC, effective in the first quarter of 2010. Those carriers meeting or exceeding the performance standard in a calendar quarter will have their penalties waived for the late POC transactions received during the quarter.

Those carriers who are penalized are encouraged to review their underwriting and electronic data processing procedures with the goal of meeting the performance standard.

The 2010 performance standard for timely filing of POC will be 90 percent of the carrier's total filings. Every quarter, the Board will compare the carrier's quarterly performance report, which is published on the Board's website, to the performance standard to determine if the penalties should be waived. The current performance report on the website will be modified to reflect the timeliness percentage of POC. The performance standard and the penalty rate will be reviewed annually with the goal of increasing the percentage of on-time filings by providing an incentive for carriers to reach the performance standard.

The quarterly performance reports will include the following International Association of Industrial Accident Boards and Commissions (IAIABC) transactions types:

Transaction Type IAIABC Transaction code
Binder 00-05-01
Binder 00-05-80
New 00-10-01
New 00-10-80
Renew 00-20-01
Renew 00-20-80
Rewrite / Reissue 00-50-01
Rewrite / Reissue 00-50-80
Reinstate 00-70-01
Add Jurisdiction 00-31-72
Add Jurisdiction 00-31-80
Add Loc 00-31-54
Add Loc 00-31-87
Correct Insured FEIN 04-33-76
Add Insured FEIN 04-32-76
Chg Employer FEIN 04-32-77
Chg Employer FEIN 04-32-96
Canceled by Insurer 00-41-59
Canceled by Insurer 00-41-64
Canceled by Insurer 00-41-66
Canceled by Insurer 00-41-69
Canceled by Insurer 00-41-70
Canceled by Insurer 00-41-71
Non Renew Insurer 00-60-64
Delete Location 00-33-56
Delete Jurisdiction 00-33-73
Delete Jurisdiction 00-33-87

While certain transaction types, such as add location, are not penalized, they are in the performance report transaction types listed above. They are included to help encourage carriers to improve their overall processing of both penalized and significant non-penalized transactions.

Carriers can review two years of performance report statistics currently available on the Board's website and compare it to the 90 percent performance standard. Please note that the number of late transactions can be skewed for some carriers. Over the last several years, some carriers have submitted many clean-up transactions, updating old policy years, which were classified as untimely in the reports. Given that these transactions should be non-recurring, the timely filing percentage should be higher for these carriers in future quarters.

Update on Penalty Issuance:

As previously noted in Subject Number 046-304, the Workers' Compensation Board established a manual and subsequent automated process for penalizing workers' compensation carriers for failure to timely file proof of coverage transactions. Effective September 30, 2009, the Board commenced its automated penalty process. Those carriers who have received a manually generated penalty through August 31, 2009 will receive an automated bill reflecting September 2009 penalties. All other carriers will receive an automated penalty for the period April 1, 2009 to September 30, 2009.

Carriers will receive four documents:

  1. Automated penalty letters mailed after the end of each calendar quarter (December, March, June and September). The penalty amount for the quarter will be included along with a penalty ID number, which must be included with the carrier's remittance advice to ensure proper crediting of payment. Those carriers meeting or exceeding the performance standard will receive a notice that the POC penalties were waived for the quarter.

    To help manage the workload, penalties will be issued to half of the penalized carriers on approximately the seventh day following the end of the quarter. The balance of the carriers will receive their penalties two weeks later.
  2. Statement summarizing penalties that remain unpaid will be mailed 60 days after the end of the calendar quarter.
  3. Detailed late transaction report itemizing each late transaction and the individual penalty assessed. This report, available in both pdf and excel formats, can be accessed only from the Board's website.
  4. Summary of late transactions by IAIABC transaction type reflecting the number and age of transactions that were late. This report, available in both pdf and excel formats, can be accessed only from the Board's website and can be used for analysis purposes.

Carriers must be registered to use the Board's web based application, Insurance Compliance Inquiry (IC Inquiry), to access the two reports on the Board's website. If you are not registered, please contact the Data Administration Unit at pocpenalty@wcb.ny.gov immediately to begin the registration process.

A carrier may file with the Chair of the Board an application for a redetermination review within thirty days of the imposition of a penalty. The Chair shall make a determination in writing on the issues raised on such application.

The application for redetermination review must be requested on the Board's web site via the IC inquiry application. Requests submitted by any other means will be rejected. Paper documentation will be accepted only if it is in support of a redetermination request submitted via the web. Please note that those carriers submitting a request exclusively on the web will receive priority review. A carrier may seek a waiver from the web filing requirement upon good cause shown.

The carrier's IC inquiry users manual, explaining how to submit an application for redetermination request via the web, will be updated on the Board's website prior to issuance of the October penalties.

A performance standard for Disability Benefits carriers will be announced in a Disability Benefits Insurance Contract Bulletin to be issued in the summer of 2010.

If you have any questions, please contact the Bureau of Compliance, Data Administration Unit at: pocpenalty@wcb.ny.gov.