New York City Delays the Most Workers’ Comp Insurance Claims in the State

Within a day, Baker filed a claim for workers’ compensation, the state program that provides medical treatment for injuries on the job and cash for recovery time. But to get his benefits, Baker first had to get a workers’ comp insurance provider to accept his case.

Unbeknownst to him, he was stuck with the insurance carrier that had amassed more penalties for mishandled and delayed cases than any other in the state: the city of New York.

“They were dragging stuff out,” Baker said. “And when it finally went through, they contest everything.”

If you’re a payroll employee in New York state, your employer is probably required to pay for a workers’ comp insurance policy. Some, like New York City, operate their own “self-insurance” system.

Insurers are supposed to start making workers’ comp payments within 18 days of the injury. In Baker’s case, it took New York City nearly four months.

The state Workers’ Compensation Board has cited the New York City Law Department, which runs the city’s insurance program, for legal infractions over 10,000 times each year since the pandemic.

From 2019 through 2023, it received three penalties for every four new workers’ comp cases it processed. Those included over 34,000 penalties for late filings and nearly 29,000 for other procedural violations like failing to properly pay claimants.

“They are late with almost every request and document,” said Derek Robinson, the legal services vice president of SSEU Local 371. “It significantly delays claimants’ payments and treatments.”

For comparison, the New York State Insurance Fund, the state-managed workers’ comp insurer that covers 2 million employees — around seven times the size of New York City’s public sector workforce — received less than half as many procedural complaints.

A spokesperson for the Law Department noted that it offers workers claiming injuries a program called salary continuation, which allows employees to use their vacation and sick days to continue getting paid while the city investigates a case. As a result, 80 percent of workers receive “timely initial payments,” the spokesperson said. The city is supposed to reimburse the time off after the fact, though workers and attorneys say that often doesn’t happen fully.

For around a month and a half, Baker said, his salary was covered by a grant that the city offers exclusively to the victims of a workplace assault. But for about two months after that ran out, he was left without any income and unable to get the city’s insurer to return his calls.

“They put you through the ringer. They pretty much ignore you and make it seem like you’re bugging them,” he said.

Once Baker got his back pay and realized that his payments of around $400 per week were not going to cover his financial needs, he decided to return to work and risk reinjuring himself for the eight months it took him to reach early retirement.

“They want you to come here and give your all, and they don’t give a damn about you once you get injured. You’re no good to them,” Baker said.

Lawyers expect that even more workers’ comp cases could be mishandled as the result of a recent statewide policy change that tightened the timeframe for workers’ comp insurance carriers on lost wages payments.

The Law Department conceded that “staffing remains a challenge as we process this huge volume of claims under worker compensation rules that have grown exponentially more complex over the last decade.”

After Baker’s doctor recommended surgery on both of his shoulders, the Law Department disputed the procedure on his right side. He’s in the process of appealing the clashing diagnosis by an independent medical examiner — one of the insurance-hired medical practitioners who scrutinize workers’ compensation claims.

“I’m used to that,” he said, referring to a prior workers’ compensation case he had to file in 2003 that resulted in two knee replacement surgeries as a result of a similar workplace incident.

“It took 13 years for me to get my replacement,” Baker said.

Incentives of the Insurance-Boss

New York City’s sluggish response times stem from a stagnant Law Department budget that has overburdened its staff attorneys. Worker-side lawyers say that the agency’s staff often effectively work as both attorneys and paralegals on cases. They lack relevant information before hearings, causing them to request extensions or make mistakes.

The agency often misses the deadline to approve or reject an application. When it does approve a case, it’s then often late to pay back the lost wages.

“At times they don’t send my check and I have to inform my attorneys,” an ACS worker testified to the state Senate. “I was employed by the city of New York since 1985 and I have never experienced such indignation.”

The gaps can spell financial crisis for workers.

“I see that with a lot of people who have horror stories, where they’ve been waiting for months and never got paid, and they’re in a situation where they have to borrow money, take a loan,” another retired ACS worker, who asked not to use their name, told New York Focus.

The state fines insurers for breaking the 18-day timeline — but it’s effectively a slap on the wrist. It costs carriers $50 for each 10-day period that a transaction or requested filing is late.

“The Law Department, they’re a different animal. I mean, they really could care less what the board tells them to do or not to do,” Alex Rosado, a workers’ comp attorney with a number of city-employed clients and the co-chair of the New York Workers’ Compensation Alliance.

City workers face a different set of issues in accessing the other core function of workers’ comp, which guarantees medical treatment for on-the-job injuries. When they seek to get medical procedures approved, lawyers report that deadlines are consistently unmet or extended for almost every step of the process.

The problems may arise in part from the structure of self-insurance. Unlike worker benefits such as unemployment insurance, workers’ comp payments come directly out of the employer’s pocket. When the boss is also the insurance carrier, hurdles to accessing benefits lower company costs.

“Self-insured [carriers] by nature are more inclined to dispute claims simply because it’s directly their money,” said Rosado.

In general, lawyers say, the cost-saving incentive can lead self-insured employers to contest or delay more cases than private insurance companies.

In 2009, the state’s 9/11 Worker Protection Task Force found that New York City appealed World Trade Center recovery and cleanup cases at a higher rate than the private sector or the city’s police, fire, and sanitation departments, which are covered by separate carriers.

But according to Rosado, the Law Department isn’t unusually aggressive in formally contesting cases — perhaps because they don’t have the resources to be.

“I don’t think they have the sufficient personnel to dispute these cases to a large extent. So they cherry pick what they’re going to dispute,” Rosado said.