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 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

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. 

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 

September 8, 2004 

SEPTEMBER 11

Federal Assistance for New York 

Workers’ Compensation Costs 

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. 

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. 
Page 1 GAO-04-1013T 

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.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 Fund2

(UEF) for benefits paid (1) for workers associated with uninsured 

employers and (2) for volunteers.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.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 

 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. 
Page 2 GAO-04-1013T 

health effects that have been observed in the aftermath of the 

September 11 terrorist attacks.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 

 5

GAO, September 11: Health Effects in the Aftermath of the World Trade Center Attack, 

GAO-04-1068T (Washington, D.C.: Sept. 8, 2004). 
Page 3 GAO-04-1013T 

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 claims6

 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. 

The New York State Workers’ Compensation Board administers the state 

workers’ compensation program and processes claims for workers’ 

 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. 

Background 
Page 4 GAO-04-1013T 

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.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, selfinsured 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: 

 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. 
Page 5 GAO-04-1013T 

$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.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;9

 and 

 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. 
Page 6 GAO-04-1013T 

• 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. 
Page 7 GAO-04-1013T 

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 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.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.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 

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

11For 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. 

The Board Used 

$49 Million for 

Benefits and 

Mitigation Efforts 

The Board Had Used a 

Sizable Portion of the 

$125 Million for Benefits 

Reimbursements and 

Mitigation Efforts 
Page 8 GAO-04-1013T 

eligible for benefit payments from the CVB.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.13

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

13New 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. 
Page 9 GAO-04-1013T 

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 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 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 

The Board Had Not Used 

any of the $25 Million 

Available for Workers with 

Uninsured Employers 

The Board Had Used Some 

of the $25 Million Available 

for Volunteers 
Page 10 GAO-04-1013T 

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.”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.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. 

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. 

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

15The Board did not establish a deadline for volunteers (or their survivors) to file 

September 11 claims. 

While Most 

September 11 Claims 

Had Been Resolved, 

Many of Those from 

Volunteers Were 

Pending 
Page 11 GAO-04-1013T 

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.16 Specifically, 90 percent 

of the 10,182 claims received17 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. 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 

 16The 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. 

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

18While 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). 

Ninety Percent of 

September 11 Claims for 

Workers’ Compensation 

Had Been Resolved 
Page 12 GAO-04-1013T 

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).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 

Death 

claims 

Injury-illness 

claims

Total

claims

Claims received 2,195 7,987 10,182

 Claims resolved 2,149 6,975 9,124

 Claims pending 46 1,012 1,058

Claims challenged after initial filing by claimanta 33 2,121 2,154

Claims appealed after Board made its decision 99 422 521

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. 

 19This 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. 
Page 13 GAO-04-1013T 

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 

Death 

claims 

Injury-illness

claims

Total

claims

Claims received 17 116 133

 Claims resolved 15 103 118

 Claims pending 2 13 15

Claims challenged after initial filing by claimanta 2 32 34

Claims appealed after Board made its decision 3 17 20

Claims that received medical or cash benefits 0 2 2

 Claims receiving continuing cash benefits 0 1 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. 

Most September 11 Claims 

for Workers with 

Uninsured Employers Had 

Been Resolved 
Page 14 GAO-04-1013T 

While the majority of all September 11 workers’ compensation claims had 

been resolved, 69 percent of volunteer claims were pending.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 

Death 

claims 

Injury-illness 

 claims

Total

claims

Claims received 1 587 588

 Claims resolved 0 185 185

 Claims pending 1 402 403

Claims challenged after initial filing by claimanta 0 14 14

Claims appealed after Board made its decision 0 0 0

Claims that received medical or cash benefits 0 85 85

 Claims receiving continuing cash benefits 0 23 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. 

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 

 20The number of volunteer claims is not included in the total number of September 11 

claims identified in table 1. 

Most September 11 Claims 

for Volunteers Were 

Pending 
Page 15 GAO-04-1013T 

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. 

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. 

GAO Contacts and 

Staff 

Acknowledgments 

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