TRIA Extension and end of 2014 Legislative Enactments Impacting Workers’ Compensation

//TRIA Extension and end of 2014 Legislative Enactments Impacting Workers’ Compensation

TRIA Extension and end of 2014 Legislative Enactments Impacting Workers’ Compensation

The TRIA Extension legislation (S 2244) ran out of time before it could be enacted due to a late objection by then Senator Tom Coburn (OK). The TRIA bill is now being taken up by the House. Also, at the end of December before adjourning for the year Congress passed and the President signed a number of bills that  will impact workers’ compensation in 2015.  The new TRIA bill and noteworthy legislation enacted at the end of 2014 are summarized below:

Terrorism Risk Insurance Act Extension

 Congress failed to finalize action in December but the House is now scheduled to take up and pass a TRIA extension in the first week back in session. The bill scheduled for consideration in the House this week may be found at http://docs.house.gov/billsthisweek/20150105/NEUGEB_001_xml.pdf

 Primary TRIA related features of the bill going to the House floor include:

Section 101. Extension of Terrorism Insurance Program.

Extends the Terrorism Risk Insurance Program for six years through December 31, 2020.

Section 102. Federal Share.

Beginning on January 1, 2016, decreases the Federal share of losses under the program by 1 percentage point annually until it equals 80 percent.

Section 103. Program Trigger.

Beginning in calendar year 2016, increases the program trigger to $200 million in $20 million annual increments over five years.

Section 104. Recoupment of Federal Share of Compensation Under the Program.

Increases the amount of Federal assistance that the Treasury Secretary must recoup from the insurance industry following a certified act of terrorism. Increases the current mandatory

recoupment amount of $27.5 billion by $2 billion each calendar year until the mandatory recoupment amount reaches $37.5 billion. In addition, once the insurance marketplace aggregate retention amount reaches $37.5 billion, requires the Treasury Secretary to issue a final rule to annually revise the amount so that it is equal to the annual average of the sum of insurer deductibles for all insurers participating in the program for the prior three calendar years.

Section 108. GAO Study.

Requires the Government Account ability Office (GAO) to study the viability of the Federal government assessing and collecting upfront premiums from insurers for terrorism reinsurance coverage or requiring insurers to create capital reserve funds for terrorism-related risks. This study would also provide a comparative analysis of the types of systems implemented in other countries that collect or assess premiums or create capital reserve funds.

Section 110. Advisory Committee on Risk-Sharing Mechanisms.

Requires the Treasury Secretary to establish an advisory committee to provide advice and recommendations to encourage the growth of nongovernmental, private market reinsurance

capacity for protection against losses arising from acts of terrorism.

Section 111. Reporting of Terrorism Insurance Data.

Beginning on January 1, 2016, requires the Treasury Secretary to collect the following information: (1) lines of insurance with exposure to terrorism; (2) premiums earned on terrorism risk coverage; (3) the geographical location of risk exposure; (4) the pricing of terrorism risk insurance; (5) the take-up rate of terrorism risk insurance; (6) the amount of private reinsurance for acts of terrorism purchased; and (7) such other data as the Secretary deems appropriate. Requires the Secretary to collect the data in a manner r that does not reveal proprietary information of the participating insurers, and to provide the House and Senate Committees of jurisdiction a report not later than June 30, 2016 and every other year thereafter.

Section 112. Annual Study of Small Insurer Market Competitiveness.

Beginning on June 30, 2017, requires the Treasury Secretary to conduct a biennial study of small insurers participating in the TRIA program to identify any competitive challenges they may face in the terrorism risk insurance marketplace.

UWC has advocated for a long term extension of TRIA and continues to work with the broader business coalition to get closure on this extension.

Tax Increase Prevention Act of 2014 (HR 5771)– signed December 19, 2014

 See http://www.gpo.gov/fdsys/pkg/BILLS-113hr5771enr/pdf/BILLS-113hr5771enr.pdf

 Changed the Computation of the Social Security Disability and Workers’ Compensation Offset

 Section 201 on page 55 provides

SEC. 201. CORRECTION TO WORKERS COMPENSATION OFFSET AGE.

(a) RETIREMENT AGE.—Section 224(a) of the Social Security Act (42 U.S.C. 424a(a)) is amended, in the matter preceding paragraph (1), by striking ‘‘the age of 65’’ and inserting ‘‘retirement age (as defined in section 216(l)(1))’’.

(b) EFFECTIVE DATE.—The amendment made by subsection (a) shall apply with respect to any individual who attains 65 years of age on or after the date that is12 months after the date of the enactment of this Act.

An explanation of the change was provided by congressional staff

“Sec. 201. Technical correction to worker’s compensation offset age. Under current law, Disability Insurance (DI) benefits are generally offset when the beneficiary also receives worker’s compensation (WC) benefits, to ensure total benefits do not exceed 80 percent of average current earnings from before the worker became disabled. The offset ends the month the worker reaches age 65 or the month the worker’s compensation payment stops, whichever occurs first. Prior to 1983 amendments, the WC offset applied to any DI beneficiary who was also receiving WC. However, when Congress increased the full retirement age (FRA) to ultimately reach age 67, it did not increase the age until which the WC offset applied. Under the provision, the age until which the WC offset applies would be aligned to the increased FRA for Social Security. This change was proposed by the Social Security Administration in 2007 and 2008. The legislation would be effective for those under the FRA beginning one year after enactment. According to CBO, the provision would decrease spending by $220 million over 2015-2024.”

Self-Insured Employers, Insurance Carriers and States should make a note of the change to be applied in claims management. Additional details should be forthcoming as SSA implements the change.

Consolidated and Further Continuing Appropriations Act, 2015

See http://www.gpo.gov/fdsys/pkg/BILLS-113hr83enr/pdf/BILLS-113hr83enr.pdf

Included specific provision to require individuals filing Longshore claims to provide social security numbers

Appropriations language on page 328 includes provision that

The Secretary may require that any person filing a notice of injury or a claim for benefits under 5 U.S.C.81, or the Longshore and Harbor Workers’ Compensation Act, provide as part of such notice and claim, such identifying information (including Social Security account number) as such regulations may prescribe.

By | 2015-01-16T19:14:26+00:00 January 6th, 2015|Categories: Uncategorized|Comments Off on TRIA Extension and end of 2014 Legislative Enactments Impacting Workers’ Compensation

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