Workers' Comp bills small businesses for mismanaged insurance
Wed, 08 Oct 2014 21:02:30 GMT —
Update: Last month we showed you how local auto repair shops are being forced to pay tens of thousands of dollars â?? thanks to the state mismanaging their Workers' Comp fund. Tonight, we are digging even deeper into this case. A man who used to be on the inside speaks out, accusing the state of setting up what he calls a "Ponzi scheme" with our local small businesses as the victim. Watch the story tonight at 11pm on NBC3.
The New York State Workers' Compensation Board is billing hundreds of small businesses for millions of dollars over a mismanaged insurance system set up during the Pataki administration.
M ike Antonacci who owns Eliminator Automotive in Auburn is among the small businessmen who will be forced to pay. Antonacci employs three people at his repair shop and by law, he is required to provide them with workers compensation insurance in case they become disabled. Antonacci told CNY Central's Jim Kenyon that he pays up to $700.00 month for comp insurance.
Earlier this year, Antonacci received a letter from the Workers' Compensation Board demanding that he reimburse the Board a total of $21,184.04. "My hands are tied because if I don't pay this, they'll put me into collection. So it's basically pay or else." Antonacci said.
Rachel McEneny, a spokesperson for the N ew York State Workers' Compensation Board, explained that during the administration of former Governor George Pataki, self insured group trusts were allowed to handle workers comp for small businesses at a discount rate. A number of those trusts including the Automotice Service and Repair Self Insurance Trust went "belly up" and now the bills are coming due.
B ecause those insurance trusts went bust, the state Workers' Comp Board was forced to pay millions of dollars in claims to disabled workers. In the case of the automotive repair industry, the state ran up a bill of $3.8 million.
43 1 repair shops statewide must reimburse the Comp Board, and Antonacci's share comes to $21,184.04.
Antonacci made this analogy, "I t would be like if I did a repair on my customer's car and asked him for $400.00 for the repair. Let's say I mismanaged my money through the course of the year. I send him a bill for $1500 because I mismanaged my money. How is that my customer's fault?"
I n an email response from Albany, the Workers' Compensation Board says the small businesses "are not being unfairly targeted. Rather the Workers' Compensation Board is ensuring that those members resolve their liabilities and do not shift them to other employers..." The Comp Board also points out that the state has set up a payment plan so Antonacci can pay off his debt over 10 years.