September 11
Federal Assistance for New York Workers' Compensation Costs Gao ID: GAO-04-1013T September 8, 2004In the aftermath of the September 11, 2001, terrorist attacks, Congress appropriated $175 million for the New York State Workers' Compensation Board (the Board) to assist with the resulting workers' compensation claims. These claims were filed by workers or volunteers (or survivors) who were injured, became ill, or died as a result of the attacks and the recovery efforts. Specifically, Congress provided federal funds to the U.S. Department of Labor (DOL) for the Board in three earmarked portions: $125 million for processing of claims, and $25 million each to reimburse the state Uninsured Employers Fund (UEF) for benefits paid (1) for workers associated with uninsured employers and (2) for volunteers. DOL transferred the funds to the Board using a grant agreement. This testimony looks at the Board's use of the $175 million in federal funds and the status of September 11 workers' compensation claims. The testimony addresses: (1) how the federal funds have been used and (2) how many applications for compensation have been received and their status. In addition, we are continuing to gather information about whether the grant agreement and the appropriation act are consistent with the Board's use of the funds.
As of June 30, 2004, of the $175 million in federal funds appropriated to help pay workers' compensation expenses related to the September 11 attacks and recovery, the New York State Workers' Compensation Board had used about $49 million. From the $125 million portion available for processing of claims, the Board had used about $44 million to reimburse two state entities--the New York State Crime Victims Board and the New York State Insurance Fund--for benefits those entities had paid to September 11 victims (or survivors). In addition, the Board had used about $4.4 million of the $125 million to prepare for responding to any future terrorist attacks. For example, the Board paid for new computer backup systems and new off-site storage contracts to ensure access to claims data in case of a disaster. At the time of our review, the Board had not yet used any of the $25 million that is available to reimburse the UEF for benefits the UEF paid to workers associated with uninsured employers (or survivors). However, the Board had used funds from the UEF to pay these benefits and was first trying to recoup these funds from the uninsured employers before drawing upon federal funds to reimburse for any unrecovered expense. Finally, the Board had used about $456,000 of the $25 million that is available to reimburse the UEF for benefits the UEF paid to volunteers (or survivors). The Board indicated that, as of mid-2004, it had received 10,182 claims for workers' compensation and 588 volunteer claims related to the September 11 attacks and recovery. Ninety percent of the workers' compensation claims had been resolved, that is, the Board had resolved all the issues that it could with the information available at that point. The remaining 10 percent of claims were pending, as the Board was waiting for additional information from claimants (such as medical evidence), hearings were yet to be held, or claimants had not pursued their case after initial filing. The Board officials noted that the status of claims was fluid: a resolved claim could change to pending if more information becomes available and the Board reopens the case. In addition, we were unable to report approval and denial rates of claims because, according to Board officials, the Board's core mission is to process individual claims and not track outcomes of claims decisions. For 52 percent of workers' compensation claims received, (1) a link had been established between the September 11 disaster and the resulting death, injury, or illness and benefits had been paid or were in the process of being paid, or (2) this link had been established but the Board had not authorized paying benefits. Of the 10,182 workers' compensation claims, 133 were associated with workers whose employers were uninsured. The Board had resolved 89 percent of these 133 claims. Of the 588 volunteer claims received, the Board had resolved 31 percent and 69 percent were pending. According to the Board, many of the volunteer claims were pending because the claimants were not actively pursuing their claims.
GAO-04-1013T, September 11: Federal Assistance for New York Workers' Compensation Costs
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Testimony Before the Subcommittee on National Security, Emerging
Threats, and International Relations, Committee on Government Reform,
House of Representatives:
United States Government Accountability Office:
GAO:
For Release on Delivery Expected at 10:00 a.m. EDT:
Wednesday, September 8, 2004:
SEPTEMBER 11:
Federal Assistance for New York Workers' Compensation Costs:
Statement of Robert E. Robertson, Director, Education, Workforce, and
Income Security Issues:
GAO-04-1013T:
GAO Highlights:
Highlights of GAO-04-1013T, testimony before the Chairman,
Subcommittee on National Security, Emerging Threats, and International
Relations, Committee on Government Reform, House of Representatives
Why GAO Did This Study:
In the aftermath of the September 11, 2001, terrorist attacks, Congress
appropriated $175 million for the New York State Workers‘ Compensation
Board (the Board) to assist with the resulting workers‘ compensation
claims. These claims were filed by workers or volunteers (or survivors)
who were injured, became ill, or died as a result of the attacks and
the recovery efforts. Specifically, Congress provided federal funds to
the U.S. Department of Labor (DOL) for the Board in three earmarked
portions: $125 million for processing of claims, and $25 million each
to reimburse the state Uninsured Employers Fund (UEF) for benefits paid
(1) for workers associated with uninsured employers and (2) for
volunteers. DOL transferred the funds to the Board using a grant
agreement.
This testimony looks at the Board‘s use of the $175 million in federal
funds and the status of September 11 workers‘ compensation claims. The
testimony addresses: (1) how the federal funds have been used and (2)
how many applications for compensation have been received and their
status. In addition, we are continuing to gather information about
whether the grant agreement and the appropriation act are consistent
with the Board‘s use of the funds.
What GAO Found:
As of June 30, 2004, of the $175 million in federal funds appropriated
to help pay workers‘ compensation expenses related to the September 11
attacks and recovery, the New York State Workers‘ Compensation Board
had used about $49 million. From the $125 million portion available for
processing of claims, the Board had used about $44 million to reimburse
two state entities”the New York State Crime Victims Board and the New
York State Insurance Fund”for benefits those entities had paid to
September 11 victims (or survivors). In addition, the Board had used
about $4.4 million of the $125 million to prepare for responding to any
future terrorist attacks. For example, the Board paid for new computer
backup systems and new off-site storage contracts to ensure access to
claims data in case of a disaster. At the time of our review, the Board
had not yet used any of the $25 million that is available to reimburse
the UEF for benefits the UEF paid to workers associated with uninsured
employers (or survivors). However, the Board had used funds from the
UEF to pay these benefits and was first trying to recoup these funds
from the uninsured employers before drawing upon federal funds to
reimburse for any unrecovered expense. Finally, the Board had used
about $456,000 of the $25 million that is available to reimburse the
UEF for benefits the UEF paid to volunteers (or survivors).
The Board indicated that, as of mid-2004, it had received 10,182 claims
for workers‘ compensation and 588 volunteer claims related to the
September 11 attacks and recovery. Ninety percent of the workers‘
compensation claims had been resolved, that is, the Board had resolved
all the issues that it could with the information available at that
point. The remaining 10 percent of claims were pending, as the Board
was waiting for additional information from claimants (such as medical
evidence), hearings were yet to be held, or claimants had not pursued
their case after initial filing. The Board officials noted that the
status of claims was fluid: a resolved claim could change to pending if
more information becomes available and the Board reopens the case. In
addition, we were unable to report approval and denial rates of claims
because, according to Board officials, the Board‘s core mission is to
process individual claims and not track outcomes of claims decisions.
For 52 percent of workers‘ compensation claims received, (1) a link had
been established between the September 11 disaster and the resulting
death, injury, or illness and benefits had been paid or were in the
process of being paid, or (2) this link had been established but the
Board had not authorized paying benefits. Of the 10,182 workers‘
compensation claims, 133 were associated with workers whose employers
were uninsured. The Board had resolved 89 percent of these 133 claims.
Of the 588 volunteer claims received, the Board had resolved 31 percent
and 69 percent were pending. According to the Board, many of the
volunteer claims were pending because the claimants were not actively
pursuing their claims.
The Board provided oral comments on a draft of GAO‘s findings and GAO
incorporated these comments as appropriate.
www.gao.gov/cgi-bin/getrpt?GAO-04-1013T.
To view the full product, including the scope and methodology, click on
the link above. For more information, contact Robert E. Robertson at
(202) 512-7215 or robertsonr@gao.gov.
[End of section]
Mr. Chairman and Members of the Subcommittee:
I am pleased to be here today to discuss New York State's use of
federal funds provided for workers' compensation expenses related to
the September 11, 2001, terrorist attacks. In the aftermath of the
terrorist attacks, Congress appropriated $175 million for the New York
State Workers' Compensation Board (the Board) to assist with the
resulting workers' compensation claims.[Footnote 1] These claims were
filed by workers or volunteers (or their survivors) who were injured,
became ill, or died as a result of the attacks and the recovery
efforts. Specifically, Congress provided federal funds to the U.S.
Department of Labor (DOL) for the Board in three earmarked portions:
$125 million for processing of claims and $25 million each to reimburse
the state Uninsured Employers Fund[Footnote 2] (UEF) for benefits paid
(1) for workers associated with uninsured employers and (2) for
volunteers.[Footnote 3] DOL transferred the funds to the Board using a
grant agreement. The federal funding provided to the Board is distinct
from several other federal efforts to provide assistance to victims and
survivors of the terrorist attacks. For example, Congress established
the September 11th Victim Compensation Fund of 2001 to provide
compensation for individuals (or their survivors) who were injured or
killed as a result of the terrorist attacks.[Footnote 4]
My testimony today focuses on the Board's use of the $175 million in
federal funds and the status of September 11 workers' compensation
claims. Specifically, my testimony addresses: (1) how the federal funds
have been used and (2) how many applications for compensation have been
received and their status. My colleague's testimony addresses the
health effects that have been observed in the aftermath of the
September 11 terrorist attacks.[Footnote 5]
We relied primarily on data provided by the Board to describe the use
of funds and the status of claims. However, we were unable to report
approval and denial rates of claims because, according to Board
officials, the Board's core mission is to process individual claims and
not track outcomes of claims decisions. In addition, the status of
claims represents a point-in-time assessment that could change in the
future. The Board officials told us that the status of claims was
fluid: a "resolved" claim (that is, the Board had resolved all issues
it could with the information available at the time) could change to a
"pending" claim if more information becomes available and the Board
reopens the case to consider the new information. To assess the
reliability of the Board data we used, we requested information on
Board systems for aggregating and reporting the data and Board policies
for ensuring data quality. We reviewed the responses to our requests
and determined that the aggregate data the Board had provided to us was
sufficiently reliable for the purposes of providing descriptive
information in our testimony. In addition, we reviewed relevant
legislation, federal grant documents, and New York's policies and
procedures for filing and processing claims. We interviewed Board
officials, DOL officials, and representatives of selected worker and
volunteer groups who filed September 11 claims with the Board. We
conducted our review from February 2004 through August 2004 in
accordance with generally accepted government auditing standards.
In summary, as of June 30, 2004, of the $175 million in federal funds
appropriated to help pay workers' compensation expenses related to the
September 11 attacks and recovery, the New York State Workers'
Compensation Board had used about $49 million. From the $125 million
portion available for processing of claims, the Board had used about
$44 million to reimburse two state entities--the New York State Crime
Victims Board (CVB) and the New York State Insurance Fund (SIF)--for
benefits those entities had paid to September 11 victims (or their
survivors). In addition, the Board had used about $4.4 million of the
$125 million to prepare for responding to any future terrorist attacks.
We are continuing to gather information about whether the grant
agreement's statement of work and the appropriation act are consistent
with these uses of the funds. At the time of our review, the Board had
not yet used any of the $25 million that is available to reimburse the
Uninsured Employers Fund (UEF) for benefits the UEF paid to workers
associated with uninsured employers (or their survivors). At the time
of our review, the Board had used funds from the UEF to pay these
benefits and was first trying to recoup these funds from the uninsured
employers before drawing upon federal funds to reimburse for any
unrecovered expense. Finally, the Board had used about $456,000 of the
$25 million that is available to reimburse the UEF for benefits the UEF
paid to volunteers (or their survivors).
The Board indicated that, as of mid-2004, it had received 10,182
claims[Footnote 6] for workers' compensation and 588 volunteer claims
related to the September 11 attacks and recovery. Ninety percent of the
workers' compensation claims had been resolved, that is, the Board had
resolved all the issues that it could with the information available at
that point. The remaining 10 percent of claims were pending, as the
Board was waiting for additional information from claimants (such as
medical evidence), hearings were yet to be held, or claimants had not
pursued their case after initial filing. For 52 percent of workers'
compensation claims received, (1) a link had been established between
the September 11 disaster and the resulting death, injury, or illness
and benefits had been paid or were in the process of being paid, or (2)
this link had been established but the Board had not authorized paying
benefits. Of the 10,182 workers' compensation claims, 133 were
associated with workers whose employers were uninsured. The Board had
resolved 89 percent of these 133 claims. Of the 588 volunteer claims
received, the Board had resolved 31 percent and 69 percent were
pending. According to the Board, many of the volunteer claims were
pending because the claimants were not actively pursuing their claims.
The Board provided oral comments on a draft of GAO's findings. GAO
incorporated these comments as appropriate.
Background:
The New York State Workers' Compensation Board administers the state
workers' compensation program and processes claims for workers'
compensation benefits. These benefits go to workers who are injured at
work or become ill because of workplace conditions and to survivors of
workers who die because of their work-related injury or illness. New
York State requires employers to provide workers' compensation
insurance--either from the State Insurance Fund (SIF), a private
insurance carrier, or self-insurance--to pay cash and/or provide
medical benefits for workers who qualify for coverage.[Footnote 7]
Because some employers do not comply with this requirement, the state
maintains a UEF to provide workers' compensation benefits for workers
associated with uninsured employers. To administer the state workers'
compensation program, the Board reviews claims to determine whether a
worker is eligible to receive workers' compensation benefits. In
simplified form, the workers' compensation claims process includes the
following steps:
* An individual files a claim.
* An insurer can challenge the claim if it questions the validity of
the claim.
* The Board resolves some cases without a hearing, while for others the
Board holds a hearing or a series of hearings before a Workers'
Compensation Administrative Law Judge with interested parties present,
such as claimants, employers, and insurance carriers.
* The Board makes a final decision whether or not benefits are to be
awarded to the claimant. For claims approved, insurance carriers, self-
insured employers, or the UEF makes direct payments to the claimant.
* Either the claimant or insurer can appeal this decision. The appeal
process involves successively higher levels of appeal; the highest
level is the New York State Court of Appeals.
As a result of the September 11 terrorist attacks, Congress
appropriated $175 million in federal funds to assist the New York State
Workers' Compensation Board with the resulting workers' compensation
claims. Specifically, the law provided the funds in three earmarked
portions: $125 million "for payment to the New York State Workers'
Compensation Review (sic) Board, for the processing of claims related
to the terrorist attacks"; $25 million "for payment to the New York
State Uninsured Employers Fund, for reimbursement of claims related to
the terrorist attacks"; and $25 million "for payment to the New York
State Uninsured Employers Fund, for reimbursement of claims related to
the first response emergency services personnel who were injured, were
disabled, or died due to the terrorist attacks." The legislation
provided no further explanation regarding the use of the federal funds.
The law appropriating the funds gave DOL responsibility for
distributing the funds. After researching various methods of
transferring the funds, DOL provided the funds to the Board in the form
of a grant.
Consistent with normal grant practices, before the funds were made
available to the Board, DOL required the Board to complete a grant
application that consisted of a statement of work, budget information,
and other documents related to use of the funds. DOL approved the
Board's grant application without making any changes. DOL awarded the
grant to the Board and made the funds available for 4 years.[Footnote
8] The grant agreement and the provisions of the underlying
appropriation act together provide the legal framework for using the
funds.
The grant agreement's statement of work, prepared by the Board,
* set out three broad categories of activities to be carried out:
(1) administration, (2) mitigation--efforts to help mitigate the
effects of future disasters, and (3) claims reimbursements to the
Uninsured Employers Fund;
* requested flexibility to "transfer funds amongst the three pools of
money," that is, the $125 million and the two $25 million
portions;[Footnote 9] and:
* listed the Board's intention "to use a portion of the disaster funds
to assist other entities by creating a contingency account within [the
Board's] funding structure that will allow the State to respond
effectively to any unexpected needs as they arise, both in
administrative and in mitigation efforts.":
The following timeline summarizes the flow of federal funds to the
Board:
* Early January 2002: Congress appropriated $175 million to DOL for the
New York State Workers' Compensation Board.
* Mid-January 2002: The Board first contacted the New York State
Department of Labor (NYDOL) and DOL's New York regional office for
guidance about using the funds. NYDOL and DOL's New York regional
office referred the Board to DOL headquarters for guidance.
* April 2002: DOL had determined that a federal grant agreement was the
appropriate vehicle for providing funds to the Board. DOL notified the
Board that the Board needed to submit a one-to-two page statement of
work describing its proposed use of the funds before a grant could be
awarded.
* October 2002: The Board submitted its complete grant application
paperwork, including the statement of work, to DOL after consulting
with the New York State Division of Budget.
* November 2002: DOL notified the Board of its decision to approve the
grant, thereby allowing the Board to draw down funds to conduct
activities consistent with the statement of work.
* May 2003: The Board made its first draw down of the funds.
As is the case with federal grants in general, DOL requires the Board
to regularly submit reports to DOL for review. These reports specify
the amount of federal funds the Board spent during the previous quarter
of the year. These reports do not require the Board to indicate
specifically how it had used the funds. In addition to these quarterly
reports, DOL can access reports on funds the Board had drawn down but
not yet spent.
The Board Used $49 Million for Benefits and Mitigation Efforts:
As of June 30, 2004, of the $175 million in federal funds to help pay
expenses related to the September 11 attacks and recovery, the New York
State Workers' Compensation Board had used about $49 million. The Board
had used about $44 million of the $125 million available for
"processing of claims" (activities that the Board described in its
statement of work as "administration" and "mitigation") to reimburse
two state entities for payment of benefits those entities had made to
individuals (or their survivors) who were injured, killed, or became
ill as a result of the September 11 terrorist attacks. Specifically,
the Board had spent about $28 million to reimburse the New York State
CVB and $16 million to reimburse the New York SIF for benefit payments
they each made to September 11 victims (or their survivors). The Board
also had used about $4.4 million on mitigation efforts to prepare for
responding to any future terrorist attacks. The Board had not yet used
any of the $25 million available to reimburse the UEF for benefits the
UEF paid to workers with uninsured employers (or their survivors).
However, the Board had used funds from the UEF to pay these benefits
and was first trying to recoup these funds from the uninsured employers
before drawing upon federal funds to reimburse for any unrecovered
expense. Finally, the Board had used about $456,000 of the second $25
million to reimburse the UEF for benefits the UEF paid to volunteers
(or their survivors) who provided assistance under the direction of an
authorized rescue entity.
The Board Had Used a Sizable Portion of the $125 Million for Benefits
Reimbursements and Mitigation Efforts:
The Board paid about $28 million of the $125 million to reimburse the
CVB--a state agency that compensates crime victims--for payments in
connection with individuals who were injured or killed during the
September 11 attacks. The state determined that the September 11
attacks were a crime that qualified for benefits under the state Crime
Victim Compensation Act.[Footnote 10] According to Board officials, New
York State temporarily designated the CVB as the first source of
benefit payments for September 11 victims because state officials
believed that this would be the most efficient way to deliver
benefits.[Footnote 11] Within a month of the attacks, the Governor
issued two formal decisions suspending limits on the benefit amounts
payable by the CVB and identifying individuals who would be eligible
for benefit payments from the CVB.[Footnote 12] According to the Board,
the reimbursement agreement between the Board and the CVB was
established and approved by the New York State Assembly, the New York
State Senate, and the Governor. Based on this agreement, the Board
reimbursed the CVB after receiving documentation describing the nature
and amounts of payments that the CVB had previously made to victims.
The CVB requested reimbursement from the Board for payments to victims
related to loss of earnings and support, loss of essential personal
property, funeral and burial expenses, and medical expenses. According
to the Board, the New York State Comptroller authorized the payments,
and the New York State Division of the Budget reviewed and approved
these payments. The Board said it did not anticipate the need to
provide additional reimbursements beyond the $28 million already
provided to the CVB because individual claimants are now going directly
to the Board and not to the CVB.
The Board paid about $16 million of the $125 million to reimburse the
SIF for workers' compensation benefits the SIF paid to September 11
victims employed by the state (or their survivors). The SIF--held by
the New York State Department of Labor--is a fund that provides
workers' compensation insurance to public entities and private
employers who elect this coverage. Specifically, the Board reimbursed
the SIF for workers' compensation benefits paid to state employees (or
their survivors) who were injured or killed during the September 11
disaster. After the SIF provided documentation to the Board on benefits
paid, the Board reimbursed the SIF to cover both payments already made
to state employees (or their survivors) and projections of future
benefit payments for these employees. These reimbursement payments were
reviewed and approved by the New York State Division of the Budget. The
Board did not expect to reimburse the SIF for many more September 11
claims because the deadline for filing had passed for injury and death
claims. However, the Board indicated that the SIF might ask for
reimbursement for a few new claims from state workers who become ill in
the future, because such workers may file a claim when symptoms of a
disease appear.[Footnote 13]
The Board used a significant part of the $125 million available for
processing claims to reimburse the CVB and the SIF for benefit payments
those entities made to victims. We are continuing to gather information
about whether these reimbursements were authorized in the grant
agreement's statement of work and whether the $125 million
appropriation earmarked for "the processing of claims" was available
for reimbursements of benefits paid. We are pursuing this matter
further and will notify the committee of our findings.
Finally, the Board had spent about $4.4 million of the $125 million on
mitigation efforts to help position the Board to respond to any future
disasters. These funds were used for a multiyear project to ensure the
Board has the ability to maintain operations, including access to all
claims data, in case the Board's main data system fails. The Board used
the funds to upgrade, purchase, and/or install computer systems; pay
salaries and fringe benefits of staff working on the project; and cover
travel expenses. For example, the Board paid for new tape and disk
backup systems, new off-site storage contracts, and new image storage
systems to ensure viability of Board data and operations. Finally, to
enhance information security, the Board developed a security awareness
program for all Board staff, and planned to test vulnerability of its
systems. While these mitigation activities were undertaken to position
the Board to recover more quickly from another disaster if one should
occur, the Board acknowledged that these investments have benefited
current operations as well. We are continuing to gather information on
whether the $125 million earmarked for claims processing was available
for these mitigation efforts.
The Board Had Not Used any of the $25 Million Available for Workers
with Uninsured Employers:
The Board had not used any of the $25 million federal funds available
to reimburse the UEF for benefits the UEF paid to workers with
uninsured employers (or their survivors). Congress appropriated these
funds for the Board to reimburse the UEF--a fund maintained by the
state that provides workers' compensation benefits for workers
associated with uninsured employers--for payments made to September 11
victims. However, the Board had used funds from the UEF to pay these
benefits and was first trying to recoup these funds from the uninsured
employers before drawing down federal funds to reimburse the UEF for
any unrecovered expense.
The Board Had Used Some of the $25 Million Available for Volunteers:
The Board had used about $456,000 of the $25 million available to
reimburse the UEF for benefits the UEF paid to volunteers (or their
survivors) who were injured or killed as a result of the September 11
attacks. Congress appropriated the $25 million for "first response
emergency services personnel" and, according to Board staff, these
funds were intended for individuals who had served as volunteers
associated with the September 11 attacks. However, the New York
workers' compensation law in existence prior to September 2001 did not
include the term "first response emergency services personnel" and did
not extend coverage to volunteers. To overcome this issue, the Chair of
the New York State Workers' Compensation Board issued an official order
that defined "first response emergency services personnel" as "[a]ll
persons who, serving without compensation or remuneration, and serving
under the direction of an authorized rescue entity or volunteer agency,
provided services to deal with the emergency situation created by the
September 11, 2001 terrorist attack on the World Trade
Center."[Footnote 14] This order also identified the types of groups
that the Board would consider to be an authorized rescue entity and
volunteer agency (including groups associated with the New York City
police and fire departments) and thus designated which volunteers were
eligible for benefits that can be reimbursed from the $25 million in
federal funds.[Footnote 15] Notably, volunteers are not covered by the
state workers' compensation program because they have no employer and,
thus, are not considered "employees." Therefore, compensation available
to September 11 volunteers is limited to the $25 million appropriated
by the Congress for reimbursement to the UEF.
While Most September 11 Claims Had Been Resolved, Many of Those from
Volunteers Were Pending:
As of mid-2004, 90 percent of September 11-related workers'
compensation claims had been resolved, that is, the Board had resolved
all the issues that it could with the information available at that
point. For the subset of claims associated with workers whose employers
were uninsured, the Board had resolved 89 percent. In addition to the
September 11 claims for workers' compensation, the Board had resolved
31 percent of the volunteer claims received and 69 percent of these
claims were pending.
Ninety Percent of September 11 Claims for Workers' Compensation Had
Been Resolved:
As of mid-2004, most September 11-related workers' compensation claims
had been resolved, that is, the Board had resolved all the issues that
it could with the information available at that point.[Footnote 16]
Specifically, 90 percent of the 10,182 claims received[Footnote 17] by
the Board had been resolved. Among the 9,124 resolved claims, 24
percent were death claims, while 76 percent were claims for an injury
or illness. (For September 11 claims data provided by the Board, see
table 1.):
For 42 percent of claims received, the Board had determined that a link
had been established between the September 11 disaster and the
resulting death, injury, or illness and benefits had been paid or were
in the process of being paid.[Footnote 18] For an additional 10 percent
of claims received, the Board had determined that a link had been
established between the September 11 disaster and the resulting death,
injury, or illness, but had not authorized paying benefits. According
to the Board, one of the reasons that benefits had not yet been paid,
even though a link had been established, was that these employees had
not missed more than 7 days of work on account of their injury or
illness.
Ten percent of the claims received by the Board were pending. These
claims were pending for a variety of reasons, including that the
claimant was waiting for his or her hearing to take place; that no
causal link had been established between the death, injury, or illness
and the workplace; or claimants had not pursued their case after
filing.
Some September 11 claims were challenged after initial filing and some
were appealed after a decision had been made. An insurance carrier and/
or employer can challenge a claim after a claim is submitted if they
dispute the evidence provided by the claimant. For September 11 claims,
insurers/employers challenged a higher proportion of injury or illness
claims than death claims. Specifically, insurers/employers challenged
about 27 percent of injury or illness claims compared with about 2
percent of death claims. According to the Board, with illness claims,
symptoms can develop over time, and sufficient medical evidence may not
exist at the time of filing to establish a link between the illness and
workplace conditions. Independent of whether a claim is challenged,
either the claimant or the insurer/employer can appeal a decision after
the Board has resolved a claim. Of the resolved September 11 claims, 5
percent of the death claims were appealed and 6 percent of injury or
illness claims were appealed.
Of the resolved September 11 claims, 36 percent were resolved with a
hearing(s) and 64 percent were resolved without a hearing(s).[Footnote
19] Of those claims with a hearing(s), 11 percent were death claims and
89 percent were injury or illness claims. The time to process claims
with a hearing was as follows: 43 percent took less than 6 months, 22
percent took between 6 months and 1 year, and 35 percent took over 1
year. Of those claims without a hearing(s), 30 percent were death
claims and 70 percent were injury or illness claims. The time to
process claims without a hearing was as follows: 69 percent took less
than 6 months, 21 percent took between 6 months and 1 year, and 10
percent took over 1 year.
Table 1: Status and Number of September 11 Workers' Compensation Claims
(excluding volunteers), mid-2004:
Status: Claims received;
Death claims: 2,195;
Injury-illness claims: 7,987; Total claims: 10,182.
Status: Claims resolved;
Death claims: 2,149;
Injury-illness claims: 6,975;
Total claims: 9,124.
Status: Claims pending;
Death claims: 46;
Injury-illness claims: 1,012;
Total claims: 1,058.
Status: Claims challenged after initial filing by claimant[A];
Death claims: 33;
Injury-illness claims: 2,121;
Total claims: 2,154.
Status: Claims appealed after Board made its decision;
Death claims: 99;
Injury-illness claims: 422;
Total claims: 521.
Source: New York State Workers' Compensation Board.
Note: Data are current as of July 5, 2004.
[A] Claims challenged may be included in either claims resolved or
claims pending.
[End of table]
Most September 11 Claims for Workers with Uninsured Employers Had Been
Resolved:
The majority (89 percent) of September 11 claims for workers with
uninsured employers had been resolved. Most of these worker claims were
resolved with a hearing(s) and took between 3 and 9 months to resolve.
However, nearly a third of these claims took over a year to resolve.
For those worker claims resolved without a hearing, most took less than
6 months to resolve. Eleven percent of claims from workers with
uninsured employers were still pending. Common reasons that these
claims were pending included that the claimant was waiting for his or
her hearing to take place and that no causal link had been established
between the death, injury, or illness and the workplace.
Some claims from workers with uninsured employers were challenged after
initial filing and some were appealed after a decision by the Board had
been made. Specifically, about 26 percent of these claims were
challenged. Independent of whether a claim was challenged, 17 percent
of the resolved claims were appealed after a decision had been made.
For two claims for workers with uninsured employers, the claimants had
received medical or cash benefits paid from state funds, and for one of
these claims, the claimant was receiving continuing cash benefits. (For
data on September 11 claims filed for workers with uninsured employers,
see table 2.):
Table 2: Status and Number of September 11 Workers' Compensation Claims
Filed for Workers with Uninsured Employers, mid-2004:
Status: Claims received; Death claims: 17;
Injury-illness claims: 116;
Total claims: 133.
Status: Claims resolved;
Death claims: 15;
Injury-illness claims: 103;
Total claims: 118.
Status: Claims pending;
Death claims: 2;
Injury-illness claims: 13;
Total claims: 15.
Status: Claims challenged after initial filing by claimant[A];
Death claims: 2;
Injury-illness claims: 32;
Total claims: 34.
Status: Claims appealed after Board made its decision; Death claims: 3;
Injury-illness claims: 17;
Total claims: 20.
Status: Claims that received medical or cash benefits; Death claims: 0;
Injury-illness claims: 2;
Total claims: 2.
Status: Claims receiving continuing cash benefits; Death claims: 0;
Injury-illness claims: 1;
Total claims: 1.
Source: New York State Workers' Compensation Board.
Note: Data are current as of August 6, 2004.
[A] Claims challenged may be included in either claims resolved or
claims pending.
[End of table]
Most September 11 Claims for Volunteers Were Pending:
While the majority of all September 11 workers' compensation claims had
been resolved, 69 percent of volunteer claims were pending.[Footnote
20] According to Board officials, a high portion of the volunteer
claims were pending because (1) sufficient medical evidence had not
been provided to establish the link between the September 11 volunteer
activities and the death, injury, or illness and (2) claimants had not
pursued their case after filing. Board officials believe that some
volunteers may not have pursued their case further because they had
filed a claim before developing symptoms and, therefore, had little, if
any, medical evidence to provide. According to Board officials, such
volunteers had filed a claim so that they could pursue benefits at a
later date if symptoms were to develop. (For data on September 11
claims filed for volunteers, see table 3.):
Table 3: Status and Number of September 11 Workers' Compensation Claims
Filed for Volunteers, mid-2004:
Status: Claims received; Death claims: 1;
Injury-illness claims: 587;
Total claims: 588.
Status: Claims resolved;
Death claims: 0;
Injury-illness claims: 185;
Total claims: 185.
Status: Claims pending;
Death claims: 1;
Injury-illness claims: 402;
Total claims: 403.
Status: Claims challenged after initial filing by claimant[A];
Death claims: 0;
Injury-illness claims: 14;
Total claims: 14.
Status: Claims appealed after Board made its decision;
Death claims: 0;
Injury-illness claims: 0;
Total claims: 0.
Status: Claims that received medical or cash benefits;
Death claims: 0;
Injury-illness claims: 85;
Total claims: 85.
Status: Claims receiving continuing cash benefits;
Death claims: 0;
Injury-illness claims: 23;
Total claims: 23.
Source: New York State Workers' Compensation Board.
Note: Data are current as of August 6, 2004.
[A] Claims challenged may be included in either claims resolved or
claims pending.
[End of table]
Ninety percent of the resolved volunteer claims did not require a
hearing. The majority of these claims were resolved within 3 to 9
months of filing for benefits. The time it took to resolve the seven
volunteer claims that required a hearing(s) ranged from less than 3
months to more than 6 months. A few volunteer claims were challenged
after initial filing: while there is no insurer involved with a
volunteer claim, the Board itself challenged 2 percent of these claims.
The Board challenged these claims because, for example, it did not
believe that a claimant had met the criteria for being considered a
September 11 volunteer or had sufficient evidence to support the claim.
There have been no appeals regarding volunteer claims. For 85 volunteer
claims, the claimants had received medical or cash benefits, and for 23
of these claims, the claimants were receiving continuing cash benefits.
Mr. Chairman, this concludes my prepared statement. I will be happy to
respond to any questions you or other Members of the Subcommittee may
have.
GAO Contacts and Staff Acknowledgments:
For information regarding this testimony, please contact Robert E.
Robertson, Director, or Brett S. Fallavollita, Assistant Director,
Education, Workforce, and Income Security at (202) 512-7215.
Individuals making contributions to this testimony include Linda L.
Siegel, Kenneth J. Adams, Tonnye Conner-White, Margie Armen, and Amy
Buck.
FOOTNOTES
[1] The law appropriating these funds was Public Law 107-117 (approved,
Jan. 10, 2002).
[2] New York State requires employers to provide workers' compensation
insurance. However, because some employers do not comply with this
requirement, the state maintains an Uninsured Employers Fund to provide
workers' compensation benefits for workers associated with uninsured
employers.
[3] The law refers to "first response emergency services personnel";
however, for the purposes of this testimony we refer to these
individuals as volunteers, that is, not associated with an employer.
[4] Benefits paid from the September 11th Victim Compensation Fund of
2001 are paid after deducting collateral sources, including (1)
workers' compensation benefits received before filing for benefits with
the Victim Fund and (2) future workers' compensation benefits to be
paid to the children of the deceased.
[5] GAO, September 11: Health Effects in the Aftermath of the World
Trade Center Attack, GAO-04-1068T (Washington, D.C.: Sept. 8, 2004).
[6] In addition to these 10,182 claims, the Board received and
cancelled 674 claims. The Board cancelled these claims for a variety of
reasons, including the case had been entered into the claims database
twice in error or the case was not related to the events of the
September 11 disaster.
[7] New York exempts the following businesses from the requirement to
carry workers' compensation insurance: (1) a business owned by one
individual with no employees that is not a corporation, (2) a business
partnership under New York State law that has no employees, and (3) a
business corporation owned by one or two individuals who own all of the
stock and hold all of the offices and that has no employees.
[8] According to DOL, the Board can apply for an extension to use the
funds beyond the 4-year limit.
[9] In the statement of work, the Board requested that the $50 million
for reimbursements be transferred to the Board in its entirety.
However, according to DOL officials, the Department of Health and Human
Services' Payment Management System--which manages grant payments for
DOL and other federal agencies--declined to make a $50 million advance
payment, noting that the statute specified that the funds were
available for "reimbursement." This action prevented the co-mingling of
the $125 million with the other funds.
[10] NY Exec. Law 621 et seq. (McKinney 2004).
[11] For non-September 11 claims, the CVB is a payor of last resort and
would pay only after payments from other sources, such as workers'
compensation or Social Security, are deducted from the final award
amount.
[12] Executive Order 113.5, September 12, 2001, and Executive Order
113.31, October 10, 2001.
[13] New York workers' compensation law requires a claimant to file
within 2 years after the accident or injury, or within 2 years after
the death of an employee from a work-related accident or injury,
whichever is later. For an occupational disease, the claim must be
filed within 2 years after the disablement or after the claimant knew
or should have known that the disease is due to the nature of the
employment, whichever is the later date.
[14] Order of the Chair #967, July 22, 2003.
[15] The Board did not establish a deadline for volunteers (or their
survivors) to file September 11 claims.
[16] The Board provided data on (1) the status of all September 11
claims (which do not include volunteer claims) and the time to process
these claims as of July 5, 2004, (2) the status of September 11 claims
for workers with uninsured employers and volunteers as of August 6,
2004, and (3) the time to process claims for workers with uninsured
employers and volunteers as of May 14, 2004.
[17] The 10,182 claims received does not include September 11 claims
for volunteers.
[18] While the Board conducted a special inquiry on this information
for the purposes of our study, the Board does not aggregate information
that would provide insights on the type of benefit received (i.e.,
medical or cash benefits) or the type of claim (i.e., death, injury, or
illness).
[19] This does not include 26 individual claims that were resolved
using a waiver agreement for which processing time was not available.
In the case of a waiver agreement, a claimant has waived his or her
rights to file a claim for workers' compensation and has entered into
an agreement regarding his or her benefits.
[20] The number of volunteer claims is not included in the total number
of September 11 claims identified in table 1.
