November 2, 1983
SUBJECT: INSURANCE
(EFF. 12-4-03)
DATED: November 2, 1983
SUPPLEMENT NO. 3 TO CIRCULAR LETTER NO.16 (1981)
WITHDRAWN
TO: ALL INSURERS AND SELF-INSURERS WRITING AUTOMOBILE INSURANCE IN THIS STATE.
RE: REDUCTION IN NO-FAULT LOSS OF EARNINGS BENEFITS FOR QUALIFIED WAGE CONTINUATION PLANS.
Section 671(1) of the Insurance Law contains a provision which requires insurers to reduce gross loss of earnings from work by benefits paid under what have become known as "qualified wage continuation plans" when calculating no-fault first party benefits payable for loss of earnings.
In order for a particular wage continuation plan to qualify under the aforementioned provision it must meet all of the following three conditions:
1) The applicant must be entitled to receive the same level of wage continuation benefits for a subsequent unrelated accident or illness when he or she returns to work after recovering from the injuries sustained in the motor vehicle accident;
2) benefits for a subsequent unrelated accident must be equal in both time and amount to the wage continuation benefits the applicant was entitled to as a result of the injuries suffered in the motor vehicle accident; and
3) wage continuation benefits for a subsequent disability must be immediately available, without any requirement that the applicant work a stated period of time before full benefits are restored.
If these three conditions are met, the plan probably qualifies.
In addition, for all "qualified plans" which provide benefits equal to less than 100% 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.
In order to provide for consistent application of this provision, the Insurance Department has been reviewing plans submitted by insurers and employers and classifying them as either "qualified" or "non-qualified". The following revised lists contain additional plans reviewed since supplement # 2 to this Circular Letter was issued October 29, 1982 (identified with a double asterisk **):
QUALIFIED PLANS |
|
EMPLOYER | COVERED EMPLOYEES AND BENEFITS |
** ARCO Metals Co. |
Hourly Employees - Entitled to up |
up to $ 140 per week for up to 26 |
|
weeks per disability. Salaried |
|
Employees - Entitled to full salary |
|
for up to 6 months per disability, |
|
after one year of service. |
|
** Bedford Central School |
Teachers on Tenure. Maximum of 2 |
District |
years at full pay. |
*** Chevrolet, Inc. |
All employees represented by the U.A.W. |
with one year or more of service |
|
are entitled to benefits for 52 |
|
weeks equal to approximately 60% |
|
of the employee's weekly salary, as |
|
set forth in schedule of benefits |
|
as contained in U.A.W. contract. |
|
Corning Glass Works |
Hourly Roll Employees - Entitled to |
an "Enriched Disability Plan", which |
|
provides up to $ 150 per week for |
|
a maximum of 26 weeks per disability. |
|
Other Than Hourly Roll Employees - |
|
Entitled to from 1 to 26 weeks of |
|
full pay per disability, depending |
|
upon length of service. The |
|
"Enriched Disability Plan", (see hourly |
|
roll employees above), |
|
is used up to |
|
$ 150 per week maximum, only to |
|
supplement the wage continuation benefit |
|
when full salary benefits have been |
|
exhausted. Insurers must ascertain |
|
number of weeks eligible injured |
|
Depository Trust Co. |
Professional, administrative, |
supervisory employees, guards and |
|
confidential secretaries are entitled |
|
to full salary for up to 180 days. |
|
* Federal District Court |
Justices only. |
Ford Motor Co. |
See Chevrolet (above) |
** G.A.T.X. Corp. |
All employees. From one to six |
(American Steamship Corp.) |
months at full pay; or combination |
of full pay and 2/3 pay for a |
|
maximum of six months, depending upon |
|
length of service. |
|
General Electric Co. |
All employees. Level I Benefits - |
20 days each 12 months, at full pay. |
|
No-Fault insurers are required to |
|
pay full no-fault benefits, (no |
|
reduction) when this benefit period |
|
is utilized, since as the time is used, |
|
it is lost. However, insurers are |
|
entitled to the applicable weekly |
|
disability offset. Level II Benefits - |
|
Payable only after Level I Benefits |
|
have been exhausted. Benefits are |
|
equal to 60% of employee's weekly |
|
salary up to a maximum weekly benefit |
|
of $ 200 for up to 26 weeks. |
|
* Greenwich Fixture Co. |
Officers of the company not covered |
by the union plan. |
|
** Ingersoll - Rand Co. |
Union Employees - $ 145 per week for |
a maximum of 52 weeks. Salaried |
|
Employees - Full salary for 3 to 26 |
|
weeks; or combination of full pay and |
|
60% of salary for a maximum of 26 |
|
weeks, depending upon length of service. |
|
* Village of Mamaroneck, N.Y. |
Police Officers. |
* Manhasset Union Free |
All professional personnel including |
School District |
teaching and administrative staff. |
Motorola, Inc. |
All employees, after 1 year of |
service are entitled to: 1. 90 days |
|
at full pay; and 2. next 90 days |
|
at half pay. |
|
* New York City |
Employees in the uniformed services |
of Police, Fire, Correction and |
|
Sanitation Departments |
|
New York State Electric and |
Hourly Employees - (with more than 6 |
Gas Corp. |
months service) - entitled to 85% of |
basic earnings (40 hour week) for |
|
up to 26 weeks per disability. |
|
Salaried Employees - Entitled to full |
|
salary for a specified period of |
|
time, based on length of service. |
|
Insurer must ascertain benefit period |
|
eligible injured person is entitled |
|
to. |
|
Niagara Mohawk Power |
All employees. Benefits are payable |
for up to 26 weeks at 100% of salary. |
|
** Occidental Chemical Corp. |
All employees (after successful |
completion of probationary period) - |
|
55% of base salary for a maximum of |
|
26 weeks per disability. |
|
** J.C. Penney |
All employees working more than 20 |
hours per week (after 13 weeks of |
|
service) - Combination of |
|
full pay |
|
and 1/2 pay for a maximum |
|
of 26 weeks |
|
depending upon length of service, |
|
after a waiting period of 0-5 days, |
|
depending upon length of service. |
|
Prudential Property and Casualty |
All Employees: (Level I) 10,15, |
or 20 days |
|
Insurance Co. |
at full pay per year depending upon |
length of service. (Level II) Payable |
|
only after initial period benefits |
|
have been exhausted. Benefits are |
|
equal to: 1) 75% of base salary for |
|
employees with less than 5 Years |
|
of service, payable for up to 26 |
|
weeks per disability; or 2) |
|
90% of base |
|
salary for employees with 5 or more |
|
years of service, payable for up to |
|
52 weeks per disability. |
|
** Reynolds Metals Co. |
Employees with less than 2 years of |
service - up to 26 weeks per |
|
disability. Employees with more than 2 |
|
years of service - up to 104 weeks |
|
per disability. Benefits range from |
|
$ 235 per week to $ 303 per week, |
|
depending upon an employee's "Insurance |
|
Class". |
|
Stauffer Chemical Co. |
All Employees. Benefits are payable |
for up to 6 months (3 months for |
|
employees with less than one year's |
|
service) at 100% of salary. |
|
* U.S. Armed Forces |
All members of the Armed Forces. |
Westinghouse Electric Corp. |
All employees scheduled to work 24 |
or more hours per week are entitled |
|
to approximately 60% of weekly |
|
salary up to a maximum of $ 200 per |
|
week for up to 26 weeks per disability. |
|
* City of Yonkers, N.Y. |
Police Officers. |
NON-QUALIFIED PLANS |
|
Alliance Tool Corp. |
International Telephone and Telegraph |
Amos Post, Inc. |
Corp. (ITT) |
Associated Metals and Minerals |
** Ivy Hill Corp. |
Corp. |
Lightron of Cornwall, Inc. |
Bristol Labs a.k.a. |
** Longines - Wittnauer Watch Co. |
Myers |
MacMillan, Inc. |
|
** Management Assistance, Inc. |
** C.D.I. Corp. |
** Montgomery Ward |
Celanese Corp. |
** M.O.N.Y. |
Community Savings Bank |
National Bulk Carriers |
Computer Task Group |
Nationwide Insurance Co. |
Con Edison |
** Nestle |
** Dellwood Foods, Inc. |
** New York Daily News |
Dobbs Ferry U.F.S.D. |
New York State Employees |
Eastman Kodak |
New York Telephone Company |
** Elmira College |
** New York Times |
** Fisher - Price Toys |
|
** W.W. Granger, Inc. |
So. Huntington Schools |
** Harris Corp. |
U.F.S.D. # 13 |
Hart Schaffner and Marx |
Sperry Rand |
(Wallachs) |
State University of New York |
I.B.M. |
** Syosset General School District |
** Western Electric |
|
NOTE: If an employee covered by a non-qualified plan is |
|
eligible for New York State Disability Benefits, |
|
the insurer is entitled to an offset pursuant |
|
to Section 671(2)(b) of the Insurance Law. |
|
* Unlimited sick leave plans providing full salary for the duration |
|
of disability. |
|
** Plans reviewed subsequent to prior revision. |
|
*** Applies to employees of all divisions of General Motors who |
|
are represented by the U.A.W. |
Insurers are reminded that insureds covered by a "qualified wage continuation plan" are entitled to a premium reduction, to reflect the insurer's reduced exposure to loss, pursuant to Section 677(6)of the Insurance Law. Insurers must grant the premium reduction upon receipt of information that the insured is entitled to benefits under a qualified wage continuation plan.
Insurers are again requested to submit for approval, to the address shown below, details of any other plans which they believe may qualify. All plans submitted will be reviewed and, periodically, the Department will issue revised lists of qualified and non-qualified wage continuation plans.
Martin Reis
Examiner
Property & Casualty Insurance Bureau
New York State Insurance Dept.
Two World Trade Center
New York, New York 10047
Very truly yours,
[SIGNATURE]
JAMES P. CORCORAN
Superintendent of Insurance
JFC/bmb