The New York State Workers' Compensation Board said that it will have enough funds, without having to borrow money from the state unemployment fund, to pay claims on behalf of a deficit-ridden employers' self-insurance operation.

Causing the problem is the group self-insured trust, Transportation Industry Workers' Compensation Trust, which was managed by Poughkeepsie, N.Y-based CRM. The trust has a $6.1 million shortfall and is due to run out of funds in five months.

A representative for the board said there will be shortfalls beyond the $6.1 million for other CRM-managed trusts, and he said those trusts have been evaluated by the WCB, but he did not have an exact figure as to what the total shortfall for CRM-related facilities will be.

Legislation passed earlier this year in New York allows the WCB to borrow up to $52 million from the Fund for Uninsured Employers to pay claims of defaulted trusts and offset assessments against trusts that remain viable.

But a WCB representative, Brian Keegan, said the board has enough money to make up the Transportation Industry Workers' Compensation Trust shortfall without having to borrow against the $52 million. He said the funds came from previous assessments across the entire group self-insured industry.

Earlier this year, trusts managed by administrator First Cardinal LLC did not pay assessments, disputing in court the WCB's authority to assess healthy trusts to make up for shortfalls caused by failing facilities.

Last month, Acting Supreme Court Justice Kimberly O'Connor in Albany ruled that the WCB has the authority to assess "all private self-insurers for the anticipated losses, liabilities and expenses" of defaulted trusts, but that in the case before the court, the WCB did not properly demonstrate that financial supports for the defaulting trusts "are about to become exhausted."

Mr. Keegan said that although First Cardinal trusts did not pay the assessments, other trusts did. He also said First Cardinal trusts will be assessed in the wake of the court decision, as the WCB has since put into place regulations to prove insolvency and address the issues raised by the court.

He explained that healthy trusts are assessed in these cases because recovering money by assessing the members of a defaulted trust takes time. Meanwhile, he said, there are claims that need to be paid while that money is being collected.

Mr. Keegan said the next step for the Transportation Industry Workers' Compensation Trust will be joint and several liability assessments on the trust members. For this process, he said the WCB sends out bills, and those who do not pay get referred to the state Attorney General's Office.

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