New York State seal

November 2, 1983

SUBJECT: INSURANCE

WITHDRAWN

(EFF. 12-4-03)

DATED: November 2, 1983

SUPPLEMENT NO. 3 TO CIRCULAR LETTER NO.16 (1981)

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. Bristol

 ** Longines - Wittnauer Watch Co.

 

 Myers

MacMillan, Inc.

 

Buffalo Envelope

 ** 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

Rochester Telephone

 

 ** 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