Obama FY 2015 Budget Includes Funding for TRIA Extension, Addresses Worker Misclassification Issues

In addition to issues related to access to workers’ compensation information by SSA, FECA Reform, and increased DBA monitoring, that I noted in my e-mail on March 7th, the budget also includes funding for an extension of TRIA in some form and increased monitoring of misclassification of workers for workers’ compensation. See the budget language below.

Terrorism Risk Insurance (from DOL budget appendix)

The Terrorism Risk Insurance Extension Act of 2007 (P.L.110–160) reauthorized and revised the program established by the Terrorism Risk Insurance Act (TRIA) of 2002 (P.L. 107–297) and administered by the Treasury Department. The 2007 Act extended the Terrorism Insurance Program for seven years, through December 31, 2014. This extension of TRIA added a requirement for commercial property and casualty insurers to make available coverage for losses from domestic, as well as foreign, acts of terrorism, and extended TRIA coverage for those losses.  The Budget baseline includes the estimated Federal cost of providing terrorism risk insurance, reflecting the 2007 TRIA extension.  While the Budget does not forecast any specific act of terrorism, on a probabilistic basis and using market-driven data, the Budget projects annual outlays and recoupment for TRIA.  On this basis, the Budget baseline projects net spending of $230million over the 2015–2019 period and $300 million over the 2015–2024 period.

In order to preserve the long-term availability and affordability of property and casualty insurance for terrorism risk, the Budget proposes to extend the Terrorism Risk Insurance Program and to implement programmatic reforms to limit taxpayer exposure and achieve cost neutrality. The Administration will work with Congress to identify appropriate adjustments to program terms to achieve budget neutrality and, over the longer term, full transition of the program to the private sector. Building on previously enacted reforms to the program, this extension may include changes to the size of the deductible, the threshold for a certified terrorist event, or the loss-sharing percentages for the Government and covered firms after the deductible is exceeded.

Misclassification

Detects and Deters the Misclassification of Workers as Independent Contractors. When employees are misclassified as independent contractors, they are deprived of the benefits and protections to which they are legally entitled, such as minimum wage, overtime, unemployment insurance, and anti-dis­crimination protections. Misclassification also unfairly disadvantages businesses who comply with the law and costs taxpayers money in lost funds for the United States Treasury, and in Social Security, Medicare, the Unemployment Trust Fund, and State programs. The Budget includes nearly $14 million to combat misclassification, in­cluding $10 million for grants to States to identify misclassification and recover unpaid taxes and $4 million for personnel at WHD to investigate misclassification.

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