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Testimony Before the Subcommittee on National Security, Emerging 
Threats, and International Relations, Committee on Government Reform, 
House of Representatives:

United States Government Accountability Office:

GAO:

For Release on Delivery Expected at 10:00 a.m. EDT:

Wednesday, September 8, 2004:

SEPTEMBER 11:

Federal Assistance for New York Workers' Compensation Costs:

Statement of Robert E. Robertson, Director, Education, Workforce, and 
Income Security Issues:

GAO-04-1013T:

GAO Highlights:

Highlights of GAO-04-1013T, testimony before the Chairman, 
Subcommittee on National Security, Emerging Threats, and International 
Relations, Committee on Government Reform, House of Representatives

Why GAO Did This Study:

In the aftermath of the September 11, 2001, terrorist attacks, Congress 
appropriated $175 million for the New York State Workers’ Compensation 
Board (the Board) to assist with the resulting workers’ compensation 
claims. These claims were filed by workers or volunteers (or survivors) 
who were injured, became ill, or died as a result of the attacks and 
the recovery efforts. Specifically, Congress provided federal funds to 
the U.S. Department of Labor (DOL) for the Board in three earmarked 
portions: $125 million for processing of claims, and $25 million each 
to reimburse the state Uninsured Employers Fund (UEF) for benefits paid 
(1) for workers associated with uninsured employers and (2) for 
volunteers. DOL transferred the funds to the Board using a grant 
agreement.

This testimony looks at the Board’s use of the $175 million in federal 
funds and the status of September 11 workers’ compensation claims. The 
testimony addresses: (1) how the federal funds have been used and (2) 
how many applications for compensation have been received and their 
status. In addition, we are continuing to gather information about 
whether the grant agreement and the appropriation act are consistent 
with the Board’s use of the funds.

What GAO Found:

As of June 30, 2004, of the $175 million in federal funds appropriated 
to help pay workers’ compensation expenses related to the September 11 
attacks and recovery, the New York State Workers’ Compensation Board 
had used about $49 million. From the $125 million portion available for 
processing of claims, the Board had used about $44 million to reimburse 
two state entities—the New York State Crime Victims Board and the New 
York State Insurance Fund—for benefits those entities had paid to 
September 11 victims (or survivors). In addition, the Board had used 
about $4.4 million of the $125 million to prepare for responding to any 
future terrorist attacks. For example, the Board paid for new computer 
backup systems and new off-site storage contracts to ensure access to 
claims data in case of a disaster. At the time of our review, the Board 
had not yet used any of the $25 million that is available to reimburse 
the UEF for benefits the UEF paid to workers associated with uninsured 
employers (or survivors). However, the Board had used funds from the 
UEF to pay these benefits and was first trying to recoup these funds 
from the uninsured employers before drawing upon federal funds to 
reimburse for any unrecovered expense. Finally, the Board had used 
about $456,000 of the $25 million that is available to reimburse the 
UEF for benefits the UEF paid to volunteers (or survivors).

The Board indicated that, as of mid-2004, it had received 10,182 claims 
for workers’ compensation and 588 volunteer claims related to the 
September 11 attacks and recovery. Ninety percent of the workers’ 
compensation claims had been resolved, that is, the Board had resolved 
all the issues that it could with the information available at that 
point. The remaining 10 percent of claims were pending, as the Board 
was waiting for additional information from claimants (such as medical 
evidence), hearings were yet to be held, or claimants had not pursued 
their case after initial filing. The Board officials noted that the 
status of claims was fluid: a resolved claim could change to pending if 
more information becomes available and the Board reopens the case. In 
addition, we were unable to report approval and denial rates of claims 
because, according to Board officials, the Board’s core mission is to 
process individual claims and not track outcomes of claims decisions. 
For 52 percent of workers’ compensation claims received, (1) a link had 
been established between the September 11 disaster and the resulting 
death, injury, or illness and benefits had been paid or were in the 
process of being paid, or (2) this link had been established but the 
Board had not authorized paying benefits. Of the 10,182 workers’ 
compensation claims, 133 were associated with workers whose employers 
were uninsured. The Board had resolved 89 percent of these 133 claims. 
Of the 588 volunteer claims received, the Board had resolved 31 percent 
and 69 percent were pending. According to the Board, many of the 
volunteer claims were pending because the claimants were not actively 
pursuing their claims.

The Board provided oral comments on a draft of GAO’s findings and GAO 
incorporated these comments as appropriate. 

www.gao.gov/cgi-bin/getrpt?GAO-04-1013T.

To view the full product, including the scope and methodology, click on 
the link above. For more information, contact Robert E. Robertson at 
(202) 512-7215 or robertsonr@gao.gov.

[End of section]

Mr. Chairman and Members of the Subcommittee:

I am pleased to be here today to discuss New York State's use of 
federal funds provided for workers' compensation expenses related to 
the September 11, 2001, terrorist attacks. In the aftermath of the 
terrorist attacks, Congress appropriated $175 million for the New York 
State Workers' Compensation Board (the Board) to assist with the 
resulting workers' compensation claims.[Footnote 1] These claims were 
filed by workers or volunteers (or their survivors) who were injured, 
became ill, or died as a result of the attacks and the recovery 
efforts. Specifically, Congress provided federal funds to the U.S. 
Department of Labor (DOL) for the Board in three earmarked portions: 
$125 million for processing of claims and $25 million each to reimburse 
the state Uninsured Employers Fund[Footnote 2] (UEF) for benefits paid 
(1) for workers associated with uninsured employers and (2) for 
volunteers.[Footnote 3] DOL transferred the funds to the Board using a 
grant agreement. The federal funding provided to the Board is distinct 
from several other federal efforts to provide assistance to victims and 
survivors of the terrorist attacks. For example, Congress established 
the September 11th Victim Compensation Fund of 2001 to provide 
compensation for individuals (or their survivors) who were injured or 
killed as a result of the terrorist attacks.[Footnote 4]

My testimony today focuses on the Board's use of the $175 million in 
federal funds and the status of September 11 workers' compensation 
claims. Specifically, my testimony addresses: (1) how the federal funds 
have been used and (2) how many applications for compensation have been 
received and their status. My colleague's testimony addresses the 
health effects that have been observed in the aftermath of the 
September 11 terrorist attacks.[Footnote 5]

We relied primarily on data provided by the Board to describe the use 
of funds and the status of claims. However, we were unable to report 
approval and denial rates of claims because, according to Board 
officials, the Board's core mission is to process individual claims and 
not track outcomes of claims decisions. In addition, the status of 
claims represents a point-in-time assessment that could change in the 
future. The Board officials told us that the status of claims was 
fluid: a "resolved" claim (that is, the Board had resolved all issues 
it could with the information available at the time) could change to a 
"pending" claim if more information becomes available and the Board 
reopens the case to consider the new information. To assess the 
reliability of the Board data we used, we requested information on 
Board systems for aggregating and reporting the data and Board policies 
for ensuring data quality. We reviewed the responses to our requests 
and determined that the aggregate data the Board had provided to us was 
sufficiently reliable for the purposes of providing descriptive 
information in our testimony. In addition, we reviewed relevant 
legislation, federal grant documents, and New York's policies and 
procedures for filing and processing claims. We interviewed Board 
officials, DOL officials, and representatives of selected worker and 
volunteer groups who filed September 11 claims with the Board. We 
conducted our review from February 2004 through August 2004 in 
accordance with generally accepted government auditing standards.

In summary, as of June 30, 2004, of the $175 million in federal funds 
appropriated to help pay workers' compensation expenses related to the 
September 11 attacks and recovery, the New York State Workers' 
Compensation Board had used about $49 million. From the $125 million 
portion available for processing of claims, the Board had used about 
$44 million to reimburse two state entities--the New York State Crime 
Victims Board (CVB) and the New York State Insurance Fund (SIF)--for 
benefits those entities had paid to September 11 victims (or their 
survivors). In addition, the Board had used about $4.4 million of the 
$125 million to prepare for responding to any future terrorist attacks. 
We are continuing to gather information about whether the grant 
agreement's statement of work and the appropriation act are consistent 
with these uses of the funds. At the time of our review, the Board had 
not yet used any of the $25 million that is available to reimburse the 
Uninsured Employers Fund (UEF) for benefits the UEF paid to workers 
associated with uninsured employers (or their survivors). At the time 
of our review, the Board had used funds from the UEF to pay these 
benefits and was first trying to recoup these funds from the uninsured 
employers before drawing upon federal funds to reimburse for any 
unrecovered expense. Finally, the Board had used about $456,000 of the 
$25 million that is available to reimburse the UEF for benefits the UEF 
paid to volunteers (or their survivors).

The Board indicated that, as of mid-2004, it had received 10,182 
claims[Footnote 6] for workers' compensation and 588 volunteer claims 
related to the September 11 attacks and recovery. Ninety percent of the 
workers' compensation claims had been resolved, that is, the Board had 
resolved all the issues that it could with the information available at 
that point. The remaining 10 percent of claims were pending, as the 
Board was waiting for additional information from claimants (such as 
medical evidence), hearings were yet to be held, or claimants had not 
pursued their case after initial filing. For 52 percent of workers' 
compensation claims received, (1) a link had been established between 
the September 11 disaster and the resulting death, injury, or illness 
and benefits had been paid or were in the process of being paid, or (2) 
this link had been established but the Board had not authorized paying 
benefits. Of the 10,182 workers' compensation claims, 133 were 
associated with workers whose employers were uninsured. The Board had 
resolved 89 percent of these 133 claims. Of the 588 volunteer claims 
received, the Board had resolved 31 percent and 69 percent were 
pending. According to the Board, many of the volunteer claims were 
pending because the claimants were not actively pursuing their claims.

The Board provided oral comments on a draft of GAO's findings. GAO 
incorporated these comments as appropriate.

Background:

The New York State Workers' Compensation Board administers the state 
workers' compensation program and processes claims for workers' 
compensation benefits. These benefits go to workers who are injured at 
work or become ill because of workplace conditions and to survivors of 
workers who die because of their work-related injury or illness. New 
York State requires employers to provide workers' compensation 
insurance--either from the State Insurance Fund (SIF), a private 
insurance carrier, or self-insurance--to pay cash and/or provide 
medical benefits for workers who qualify for coverage.[Footnote 7] 
Because some employers do not comply with this requirement, the state 
maintains a UEF to provide workers' compensation benefits for workers 
associated with uninsured employers. To administer the state workers' 
compensation program, the Board reviews claims to determine whether a 
worker is eligible to receive workers' compensation benefits. In 
simplified form, the workers' compensation claims process includes the 
following steps:

* An individual files a claim.

* An insurer can challenge the claim if it questions the validity of 
the claim.

* The Board resolves some cases without a hearing, while for others the 
Board holds a hearing or a series of hearings before a Workers' 
Compensation Administrative Law Judge with interested parties present, 
such as claimants, employers, and insurance carriers.

* The Board makes a final decision whether or not benefits are to be 
awarded to the claimant. For claims approved, insurance carriers, self-
insured employers, or the UEF makes direct payments to the claimant.

* Either the claimant or insurer can appeal this decision. The appeal 
process involves successively higher levels of appeal; the highest 
level is the New York State Court of Appeals.

As a result of the September 11 terrorist attacks, Congress 
appropriated $175 million in federal funds to assist the New York State 
Workers' Compensation Board with the resulting workers' compensation 
claims. Specifically, the law provided the funds in three earmarked 
portions: $125 million "for payment to the New York State Workers' 
Compensation Review (sic) Board, for the processing of claims related 
to the terrorist attacks"; $25 million "for payment to the New York 
State Uninsured Employers Fund, for reimbursement of claims related to 
the terrorist attacks"; and $25 million "for payment to the New York 
State Uninsured Employers Fund, for reimbursement of claims related to 
the first response emergency services personnel who were injured, were 
disabled, or died due to the terrorist attacks." The legislation 
provided no further explanation regarding the use of the federal funds. 
The law appropriating the funds gave DOL responsibility for 
distributing the funds. After researching various methods of 
transferring the funds, DOL provided the funds to the Board in the form 
of a grant.

Consistent with normal grant practices, before the funds were made 
available to the Board, DOL required the Board to complete a grant 
application that consisted of a statement of work, budget information, 
and other documents related to use of the funds. DOL approved the 
Board's grant application without making any changes. DOL awarded the 
grant to the Board and made the funds available for 4 years.[Footnote 
8] The grant agreement and the provisions of the underlying 
appropriation act together provide the legal framework for using the 
funds.

The grant agreement's statement of work, prepared by the Board,

* set out three broad categories of activities to be carried out: 
(1) administration, (2) mitigation--efforts to help mitigate the 
effects of future disasters, and (3) claims reimbursements to the 
Uninsured Employers Fund;

* requested flexibility to "transfer funds amongst the three pools of 
money," that is, the $125 million and the two $25 million 
portions;[Footnote 9] and:

* listed the Board's intention "to use a portion of the disaster funds 
to assist other entities by creating a contingency account within [the 
Board's] funding structure that will allow the State to respond 
effectively to any unexpected needs as they arise, both in 
administrative and in mitigation efforts.":

The following timeline summarizes the flow of federal funds to the 
Board:

* Early January 2002: Congress appropriated $175 million to DOL for the 
New York State Workers' Compensation Board.

* Mid-January 2002: The Board first contacted the New York State 
Department of Labor (NYDOL) and DOL's New York regional office for 
guidance about using the funds. NYDOL and DOL's New York regional 
office referred the Board to DOL headquarters for guidance.

* April 2002: DOL had determined that a federal grant agreement was the 
appropriate vehicle for providing funds to the Board. DOL notified the 
Board that the Board needed to submit a one-to-two page statement of 
work describing its proposed use of the funds before a grant could be 
awarded.

* October 2002: The Board submitted its complete grant application 
paperwork, including the statement of work, to DOL after consulting 
with the New York State Division of Budget.

* November 2002: DOL notified the Board of its decision to approve the 
grant, thereby allowing the Board to draw down funds to conduct 
activities consistent with the statement of work.

* May 2003: The Board made its first draw down of the funds.

As is the case with federal grants in general, DOL requires the Board 
to regularly submit reports to DOL for review. These reports specify 
the amount of federal funds the Board spent during the previous quarter 
of the year. These reports do not require the Board to indicate 
specifically how it had used the funds. In addition to these quarterly 
reports, DOL can access reports on funds the Board had drawn down but 
not yet spent.

The Board Used $49 Million for Benefits and Mitigation Efforts:

As of June 30, 2004, of the $175 million in federal funds to help pay 
expenses related to the September 11 attacks and recovery, the New York 
State Workers' Compensation Board had used about $49 million. The Board 
had used about $44 million of the $125 million available for 
"processing of claims" (activities that the Board described in its 
statement of work as "administration" and "mitigation") to reimburse 
two state entities for payment of benefits those entities had made to 
individuals (or their survivors) who were injured, killed, or became 
ill as a result of the September 11 terrorist attacks. Specifically, 
the Board had spent about $28 million to reimburse the New York State 
CVB and $16 million to reimburse the New York SIF for benefit payments 
they each made to September 11 victims (or their survivors). The Board 
also had used about $4.4 million on mitigation efforts to prepare for 
responding to any future terrorist attacks. The Board had not yet used 
any of the $25 million available to reimburse the UEF for benefits the 
UEF paid to workers with uninsured employers (or their survivors). 
However, the Board had used funds from the UEF to pay these benefits 
and was first trying to recoup these funds from the uninsured employers 
before drawing upon federal funds to reimburse for any unrecovered 
expense. Finally, the Board had used about $456,000 of the second $25 
million to reimburse the UEF for benefits the UEF paid to volunteers 
(or their survivors) who provided assistance under the direction of an 
authorized rescue entity.

The Board Had Used a Sizable Portion of the $125 Million for Benefits 
Reimbursements and Mitigation Efforts:

The Board paid about $28 million of the $125 million to reimburse the 
CVB--a state agency that compensates crime victims--for payments in 
connection with individuals who were injured or killed during the 
September 11 attacks. The state determined that the September 11 
attacks were a crime that qualified for benefits under the state Crime 
Victim Compensation Act.[Footnote 10] According to Board officials, New 
York State temporarily designated the CVB as the first source of 
benefit payments for September 11 victims because state officials 
believed that this would be the most efficient way to deliver 
benefits.[Footnote 11] Within a month of the attacks, the Governor 
issued two formal decisions suspending limits on the benefit amounts 
payable by the CVB and identifying individuals who would be eligible 
for benefit payments from the CVB.[Footnote 12] According to the Board, 
the reimbursement agreement between the Board and the CVB was 
established and approved by the New York State Assembly, the New York 
State Senate, and the Governor. Based on this agreement, the Board 
reimbursed the CVB after receiving documentation describing the nature 
and amounts of payments that the CVB had previously made to victims. 
The CVB requested reimbursement from the Board for payments to victims 
related to loss of earnings and support, loss of essential personal 
property, funeral and burial expenses, and medical expenses. According 
to the Board, the New York State Comptroller authorized the payments, 
and the New York State Division of the Budget reviewed and approved 
these payments. The Board said it did not anticipate the need to 
provide additional reimbursements beyond the $28 million already 
provided to the CVB because individual claimants are now going directly 
to the Board and not to the CVB.

The Board paid about $16 million of the $125 million to reimburse the 
SIF for workers' compensation benefits the SIF paid to September 11 
victims employed by the state (or their survivors). The SIF--held by 
the New York State Department of Labor--is a fund that provides 
workers' compensation insurance to public entities and private 
employers who elect this coverage. Specifically, the Board reimbursed 
the SIF for workers' compensation benefits paid to state employees (or 
their survivors) who were injured or killed during the September 11 
disaster. After the SIF provided documentation to the Board on benefits 
paid, the Board reimbursed the SIF to cover both payments already made 
to state employees (or their survivors) and projections of future 
benefit payments for these employees. These reimbursement payments were 
reviewed and approved by the New York State Division of the Budget. The 
Board did not expect to reimburse the SIF for many more September 11 
claims because the deadline for filing had passed for injury and death 
claims. However, the Board indicated that the SIF might ask for 
reimbursement for a few new claims from state workers who become ill in 
the future, because such workers may file a claim when symptoms of a 
disease appear.[Footnote 13]

The Board used a significant part of the $125 million available for 
processing claims to reimburse the CVB and the SIF for benefit payments 
those entities made to victims. We are continuing to gather information 
about whether these reimbursements were authorized in the grant 
agreement's statement of work and whether the $125 million 
appropriation earmarked for "the processing of claims" was available 
for reimbursements of benefits paid. We are pursuing this matter 
further and will notify the committee of our findings.

Finally, the Board had spent about $4.4 million of the $125 million on 
mitigation efforts to help position the Board to respond to any future 
disasters. These funds were used for a multiyear project to ensure the 
Board has the ability to maintain operations, including access to all 
claims data, in case the Board's main data system fails. The Board used 
the funds to upgrade, purchase, and/or install computer systems; pay 
salaries and fringe benefits of staff working on the project; and cover 
travel expenses. For example, the Board paid for new tape and disk 
backup systems, new off-site storage contracts, and new image storage 
systems to ensure viability of Board data and operations. Finally, to 
enhance information security, the Board developed a security awareness 
program for all Board staff, and planned to test vulnerability of its 
systems. While these mitigation activities were undertaken to position 
the Board to recover more quickly from another disaster if one should 
occur, the Board acknowledged that these investments have benefited 
current operations as well. We are continuing to gather information on 
whether the $125 million earmarked for claims processing was available 
for these mitigation efforts.

The Board Had Not Used any of the $25 Million Available for Workers 
with Uninsured Employers:

The Board had not used any of the $25 million federal funds available 
to reimburse the UEF for benefits the UEF paid to workers with 
uninsured employers (or their survivors). Congress appropriated these 
funds for the Board to reimburse the UEF--a fund maintained by the 
state that provides workers' compensation benefits for workers 
associated with uninsured employers--for payments made to September 11 
victims. However, the Board had used funds from the UEF to pay these 
benefits and was first trying to recoup these funds from the uninsured 
employers before drawing down federal funds to reimburse the UEF for 
any unrecovered expense.

The Board Had Used Some of the $25 Million Available for Volunteers:

The Board had used about $456,000 of the $25 million available to 
reimburse the UEF for benefits the UEF paid to volunteers (or their 
survivors) who were injured or killed as a result of the September 11 
attacks. Congress appropriated the $25 million for "first response 
emergency services personnel" and, according to Board staff, these 
funds were intended for individuals who had served as volunteers 
associated with the September 11 attacks. However, the New York 
workers' compensation law in existence prior to September 2001 did not 
include the term "first response emergency services personnel" and did 
not extend coverage to volunteers. To overcome this issue, the Chair of 
the New York State Workers' Compensation Board issued an official order 
that defined "first response emergency services personnel" as "[a]ll 
persons who, serving without compensation or remuneration, and serving 
under the direction of an authorized rescue entity or volunteer agency, 
provided services to deal with the emergency situation created by the 
September 11, 2001 terrorist attack on the World Trade 
Center."[Footnote 14] This order also identified the types of groups 
that the Board would consider to be an authorized rescue entity and 
volunteer agency (including groups associated with the New York City 
police and fire departments) and thus designated which volunteers were 
eligible for benefits that can be reimbursed from the $25 million in 
federal funds.[Footnote 15] Notably, volunteers are not covered by the 
state workers' compensation program because they have no employer and, 
thus, are not considered "employees." Therefore, compensation available 
to September 11 volunteers is limited to the $25 million appropriated 
by the Congress for reimbursement to the UEF.

While Most September 11 Claims Had Been Resolved, Many of Those from 
Volunteers Were Pending:

As of mid-2004, 90 percent of September 11-related workers' 
compensation claims had been resolved, that is, the Board had resolved 
all the issues that it could with the information available at that 
point. For the subset of claims associated with workers whose employers 
were uninsured, the Board had resolved 89 percent. In addition to the 
September 11 claims for workers' compensation, the Board had resolved 
31 percent of the volunteer claims received and 69 percent of these 
claims were pending.

Ninety Percent of September 11 Claims for Workers' Compensation Had 
Been Resolved:

As of mid-2004, most September 11-related workers' compensation claims 
had been resolved, that is, the Board had resolved all the issues that 
it could with the information available at that point.[Footnote 16] 
Specifically, 90 percent of the 10,182 claims received[Footnote 17] by 
the Board had been resolved. Among the 9,124 resolved claims, 24 
percent were death claims, while 76 percent were claims for an injury 
or illness. (For September 11 claims data provided by the Board, see 
table 1.):

For 42 percent of claims received, the Board had determined that a link 
had been established between the September 11 disaster and the 
resulting death, injury, or illness and benefits had been paid or were 
in the process of being paid.[Footnote 18] For an additional 10 percent 
of claims received, the Board had determined that a link had been 
established between the September 11 disaster and the resulting death, 
injury, or illness, but had not authorized paying benefits. According 
to the Board, one of the reasons that benefits had not yet been paid, 
even though a link had been established, was that these employees had 
not missed more than 7 days of work on account of their injury or 
illness.

Ten percent of the claims received by the Board were pending. These 
claims were pending for a variety of reasons, including that the 
claimant was waiting for his or her hearing to take place; that no 
causal link had been established between the death, injury, or illness 
and the workplace; or claimants had not pursued their case after 
filing.

Some September 11 claims were challenged after initial filing and some 
were appealed after a decision had been made. An insurance carrier and/
or employer can challenge a claim after a claim is submitted if they 
dispute the evidence provided by the claimant. For September 11 claims, 
insurers/employers challenged a higher proportion of injury or illness 
claims than death claims. Specifically, insurers/employers challenged 
about 27 percent of injury or illness claims compared with about 2 
percent of death claims. According to the Board, with illness claims, 
symptoms can develop over time, and sufficient medical evidence may not 
exist at the time of filing to establish a link between the illness and 
workplace conditions. Independent of whether a claim is challenged, 
either the claimant or the insurer/employer can appeal a decision after 
the Board has resolved a claim. Of the resolved September 11 claims, 5 
percent of the death claims were appealed and 6 percent of injury or 
illness claims were appealed.

Of the resolved September 11 claims, 36 percent were resolved with a 
hearing(s) and 64 percent were resolved without a hearing(s).[Footnote 
19] Of those claims with a hearing(s), 11 percent were death claims and 
89 percent were injury or illness claims. The time to process claims 
with a hearing was as follows: 43 percent took less than 6 months, 22 
percent took between 6 months and 1 year, and 35 percent took over 1 
year. Of those claims without a hearing(s), 30 percent were death 
claims and 70 percent were injury or illness claims. The time to 
process claims without a hearing was as follows: 69 percent took less 
than 6 months, 21 percent took between 6 months and 1 year, and 10 
percent took over 1 year.

Table 1: Status and Number of September 11 Workers' Compensation Claims 
(excluding volunteers), mid-2004:

Status: Claims received; 
Death claims: 2,195; 
Injury-illness claims: 7,987; Total claims: 10,182.

Status: Claims resolved; 
Death claims: 2,149; 
Injury-illness claims: 6,975; 
Total claims: 9,124.

Status: Claims pending; 
Death claims: 46; 
Injury-illness claims: 1,012; 
Total claims: 1,058.

Status: Claims challenged after initial filing by claimant[A]; 
Death claims: 33; 
Injury-illness claims: 2,121; 
Total claims: 2,154.

Status: Claims appealed after Board made its decision; 
Death claims: 99; 
Injury-illness claims: 422; 
Total claims: 521.

Source: New York State Workers' Compensation Board.

Note: Data are current as of July 5, 2004.

[A] Claims challenged may be included in either claims resolved or 
claims pending.

[End of table]

Most September 11 Claims for Workers with Uninsured Employers Had Been 
Resolved:

The majority (89 percent) of September 11 claims for workers with 
uninsured employers had been resolved. Most of these worker claims were 
resolved with a hearing(s) and took between 3 and 9 months to resolve. 
However, nearly a third of these claims took over a year to resolve. 
For those worker claims resolved without a hearing, most took less than 
6 months to resolve. Eleven percent of claims from workers with 
uninsured employers were still pending. Common reasons that these 
claims were pending included that the claimant was waiting for his or 
her hearing to take place and that no causal link had been established 
between the death, injury, or illness and the workplace.

Some claims from workers with uninsured employers were challenged after 
initial filing and some were appealed after a decision by the Board had 
been made. Specifically, about 26 percent of these claims were 
challenged. Independent of whether a claim was challenged, 17 percent 
of the resolved claims were appealed after a decision had been made. 
For two claims for workers with uninsured employers, the claimants had 
received medical or cash benefits paid from state funds, and for one of 
these claims, the claimant was receiving continuing cash benefits. (For 
data on September 11 claims filed for workers with uninsured employers, 
see table 2.):

Table 2: Status and Number of September 11 Workers' Compensation Claims 
Filed for Workers with Uninsured Employers, mid-2004:

Status: Claims received; Death claims: 17; 
Injury-illness claims: 116; 
Total claims: 133.

Status: Claims resolved; 
Death claims: 15; 
Injury-illness claims: 103; 
Total claims: 118.

Status: Claims pending; 
Death claims: 2; 
Injury-illness claims: 13; 
Total claims: 15.

Status: Claims challenged after initial filing by claimant[A]; 
Death claims: 2; 
Injury-illness claims: 32; 
Total claims: 34.

Status: Claims appealed after Board made its decision; Death claims: 3; 
Injury-illness claims: 17; 
Total claims: 20.

Status: Claims that received medical or cash benefits; Death claims: 0; 
Injury-illness claims: 2; 
Total claims: 2.

Status: Claims receiving continuing cash benefits; Death claims: 0; 
Injury-illness claims: 1; 
Total claims: 1.

Source: New York State Workers' Compensation Board.

Note: Data are current as of August 6, 2004.

[A] Claims challenged may be included in either claims resolved or 
claims pending.

[End of table]

Most September 11 Claims for Volunteers Were Pending:

While the majority of all September 11 workers' compensation claims had 
been resolved, 69 percent of volunteer claims were pending.[Footnote 
20] According to Board officials, a high portion of the volunteer 
claims were pending because (1) sufficient medical evidence had not 
been provided to establish the link between the September 11 volunteer 
activities and the death, injury, or illness and (2) claimants had not 
pursued their case after filing. Board officials believe that some 
volunteers may not have pursued their case further because they had 
filed a claim before developing symptoms and, therefore, had little, if 
any, medical evidence to provide. According to Board officials, such 
volunteers had filed a claim so that they could pursue benefits at a 
later date if symptoms were to develop. (For data on September 11 
claims filed for volunteers, see table 3.):

Table 3: Status and Number of September 11 Workers' Compensation Claims 
Filed for Volunteers, mid-2004:

Status: Claims received; Death claims: 1; 
Injury-illness claims: 587; 
Total claims: 588.

Status: Claims resolved; 
Death claims: 0; 
Injury-illness claims: 185; 
Total claims: 185.

Status: Claims pending; 
Death claims: 1; 
Injury-illness claims: 402; 
Total claims: 403.

Status: Claims challenged after initial filing by claimant[A]; 
Death claims: 0; 
Injury-illness claims: 14; 
Total claims: 14.

Status: Claims appealed after Board made its decision; 
Death claims: 0; 
Injury-illness claims: 0; 
Total claims: 0.

Status: Claims that received medical or cash benefits; 
Death claims: 0; 
Injury-illness claims: 85; 
Total claims: 85.

Status: Claims receiving continuing cash benefits; 
Death claims: 0; 
Injury-illness claims: 23; 
Total claims: 23.

Source: New York State Workers' Compensation Board.

Note: Data are current as of August 6, 2004.

[A] Claims challenged may be included in either claims resolved or 
claims pending.

[End of table]

Ninety percent of the resolved volunteer claims did not require a 
hearing. The majority of these claims were resolved within 3 to 9 
months of filing for benefits. The time it took to resolve the seven 
volunteer claims that required a hearing(s) ranged from less than 3 
months to more than 6 months. A few volunteer claims were challenged 
after initial filing: while there is no insurer involved with a 
volunteer claim, the Board itself challenged 2 percent of these claims. 
The Board challenged these claims because, for example, it did not 
believe that a claimant had met the criteria for being considered a 
September 11 volunteer or had sufficient evidence to support the claim. 
There have been no appeals regarding volunteer claims. For 85 volunteer 
claims, the claimants had received medical or cash benefits, and for 23 
of these claims, the claimants were receiving continuing cash benefits.

Mr. Chairman, this concludes my prepared statement. I will be happy to 
respond to any questions you or other Members of the Subcommittee may 
have.

GAO Contacts and Staff Acknowledgments:

For information regarding this testimony, please contact Robert E. 
Robertson, Director, or Brett S. Fallavollita, Assistant Director, 
Education, Workforce, and Income Security at (202) 512-7215. 
Individuals making contributions to this testimony include Linda L. 
Siegel, Kenneth J. Adams, Tonnye Conner-White, Margie Armen, and Amy 
Buck.

FOOTNOTES

[1] The law appropriating these funds was Public Law 107-117 (approved, 
Jan. 10, 2002). 

[2] New York State requires employers to provide workers' compensation 
insurance. However, because some employers do not comply with this 
requirement, the state maintains an Uninsured Employers Fund to provide 
workers' compensation benefits for workers associated with uninsured 
employers. 

[3] The law refers to "first response emergency services personnel"; 
however, for the purposes of this testimony we refer to these 
individuals as volunteers, that is, not associated with an employer. 

[4] Benefits paid from the September 11th Victim Compensation Fund of 
2001 are paid after deducting collateral sources, including (1) 
workers' compensation benefits received before filing for benefits with 
the Victim Fund and (2) future workers' compensation benefits to be 
paid to the children of the deceased. 

[5] GAO, September 11: Health Effects in the Aftermath of the World 
Trade Center Attack, GAO-04-1068T (Washington, D.C.: Sept. 8, 2004). 

[6] In addition to these 10,182 claims, the Board received and 
cancelled 674 claims. The Board cancelled these claims for a variety of 
reasons, including the case had been entered into the claims database 
twice in error or the case was not related to the events of the 
September 11 disaster. 

[7] New York exempts the following businesses from the requirement to 
carry workers' compensation insurance: (1) a business owned by one 
individual with no employees that is not a corporation, (2) a business 
partnership under New York State law that has no employees, and (3) a 
business corporation owned by one or two individuals who own all of the 
stock and hold all of the offices and that has no employees.

[8] According to DOL, the Board can apply for an extension to use the 
funds beyond the 4-year limit. 

[9] In the statement of work, the Board requested that the $50 million 
for reimbursements be transferred to the Board in its entirety. 
However, according to DOL officials, the Department of Health and Human 
Services' Payment Management System--which manages grant payments for 
DOL and other federal agencies--declined to make a $50 million advance 
payment, noting that the statute specified that the funds were 
available for "reimbursement." This action prevented the co-mingling of 
the $125 million with the other funds. 

[10] NY Exec. Law 621 et seq. (McKinney 2004). 

[11] For non-September 11 claims, the CVB is a payor of last resort and 
would pay only after payments from other sources, such as workers' 
compensation or Social Security, are deducted from the final award 
amount. 

[12] Executive Order 113.5, September 12, 2001, and Executive Order 
113.31, October 10, 2001.

[13] New York workers' compensation law requires a claimant to file 
within 2 years after the accident or injury, or within 2 years after 
the death of an employee from a work-related accident or injury, 
whichever is later. For an occupational disease, the claim must be 
filed within 2 years after the disablement or after the claimant knew 
or should have known that the disease is due to the nature of the 
employment, whichever is the later date. 

[14] Order of the Chair #967, July 22, 2003. 

[15] The Board did not establish a deadline for volunteers (or their 
survivors) to file September 11 claims. 

[16] The Board provided data on (1) the status of all September 11 
claims (which do not include volunteer claims) and the time to process 
these claims as of July 5, 2004, (2) the status of September 11 claims 
for workers with uninsured employers and volunteers as of August 6, 
2004, and (3) the time to process claims for workers with uninsured 
employers and volunteers as of May 14, 2004. 

[17] The 10,182 claims received does not include September 11 claims 
for volunteers. 

[18] While the Board conducted a special inquiry on this information 
for the purposes of our study, the Board does not aggregate information 
that would provide insights on the type of benefit received (i.e., 
medical or cash benefits) or the type of claim (i.e., death, injury, or 
illness). 

[19] This does not include 26 individual claims that were resolved 
using a waiver agreement for which processing time was not available. 
In the case of a waiver agreement, a claimant has waived his or her 
rights to file a claim for workers' compensation and has entered into 
an agreement regarding his or her benefits. 

[20] The number of volunteer claims is not included in the total number 
of September 11 claims identified in table 1.