N.Y. Change Allows Horsemen to Negotiate Workers' Comp

N.Y. Change Allows Horsemen to Negotiate Workers' Comp
Photo: Keeneland Photos
Richard Violette Jr.calls the change a "necessary first step"

Thoroughbred owners and trainers in New York have reached out to insurance companies in the past year or two to try to control the rising costs of providing workers' compensation coverage for jockeys, exercise riders, and apprentice jockeys.

But the efforts eventually fizzled because owners and trainers, through a fund they pay into, lacked something key: the legal authority to secure insurance coverage on their own.

That recently changed with the approval of a new state budget in Albany that, for the first time, gives the New York Jockey Injury Compensation Fund authority to negotiate directly with insurance companies for not just traditionally covered workers—such as jockeys—but possibly to include all backstretch workers in a blanket kind of policy.

"It was a needed first step,'' said Richard Violette Jr., president of the New York Thoroughbred Horsemen’s Association, which represents owners and trainers at New York Racing Association tracks.

The new measure also affects workers' compensation insurance at Finger Lakes racetrack in upstate New York.

Industry officials for years have complained that rising workers' compensation costs are sharply boosting payroll costs, a situation they say has increasingly kept out-of-state trainers away from New York racing. The Thoroughbred horsemen's group estimates workers' compensation costs five years ago totaled 11% of payroll for jockeys, exercise riders, and apprentice jockeys. Today the group says it has hit 25% to cover workplace injuries on and off the tracks.

"It's an expensive state in which to do business, and while people who run the state hate to hear it, we always rank near the lowest in the country as a state in which to do business in,'' Violette said. Workers' compensation expenses have been targeted by the industry as a major cost to get under control.

But past attempts to get insurance underwriters to come up with coverage plans—a long and expensive undertaking—was universally rejected because the owners and trainers did not have the authority to negotiate their own policy, according to the horsemen's group's president.

Violette said there have been some "preliminary" talks with potential insurers about obtaining some type of hybrid self-insurance coverage, which he said could include a high deductible coverage for the most serious of workplace injuries. It could mean bringing backstretch workers into a blanket-type plan that would also cover jockeys and the other work titles now in the Jockey Injury Compensation Fund. 

A jockey, apprentice jockey, or exercise person "performing services" related to racing for an owner or trainer is considered an "employee" by the state of New York for the purposes of workers' compensation coverage. 

A small section in one of the thousands of pages of bills enacting a new 2017-18 state budget states the insurance fund "may elect ... to secure workers' compensation insurance coverage through a form of self-insurance.'' The coverage plan would have to be approved by the state Gaming Commission and meet requirements of a state's workers compensation board. The provision was signed earlier this month by Gov. Andrew Cuomo.

The budget provision also provides for a racing safety committee to review an annual risk management report and to "make non-binding recommendations for the implementation of the safety proposals and initiatives set for in such report.'' The seven-member group will be composed of representatives from NYRA, Finger Lakes, the horsemen's groups, the injury compensation fund, the state Gaming Commission, and the Jockeys' Guild.

Tracks will develop, the legislation states, safety rules for training activities that include everything from required response to loose horses, bans on cell phone use while mounted on a horse, and requirements for jogging, galloping, and breezing.

Violette said the work ahead to find alternative workers' compensation insurance coverage plans will take many months. "What it means is we can, in good faith, now sit down with insurance companies. And if it doesn't save money, it's a non-starter,'' Violette said of efforts to control insurance costs.

The insurance matter has been a thorny one for several years. The 2016 state budget allowed the release of $2 million from a "purse cushion" account to help pay for the insurance costs. Money to pay for the insurance coverage comes from per-stall, per-day charges, a portion of purse payments, and an annual charge for all owners and trainers. The effort to give new flexibility to negotiate directly with insurance underwriters and provide some alternative to a self-insurance policy was sought in 2016. The push failed during end-of-session talks last June.

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