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NEW YORK COMPENSATION INSURANCE RATING BOARD

200 East Forty-Second Street, New York, New York 10017

Telephone (212) 697-3535 - Fax (212) 599-6594

www.nycirb.org

RE: Workers Compensation Insurance

New York Construction Classification Premium Adjustment Program

Since 1993, the New York Compensation Insurance Rating Board has overseen and

managed the New York Construction Classification Premium Adjustment Program (NYCCPAP), also known as CPAP. This Program was developed to address premium differences between high wage and low wage paying employers in the construction/contracting industries in New York State.

The CPAP provides premium credits to experience rated employers whose employees earn an average of $15.50 or more in one or more of the eligible classification codes. Our records indicate that, based upon the classification codes stated on your workers compensation insurance policy, you may be eligible for a premium credit when your policy renews.

To apply for this credit, please visit:

http://cpap.nycirb.org/

Once on the website you can fill out an online application or download a paper version. When on the website, please review all of the application instructions (where you will find a listing of eligible classification codes as well as what quarterly payrolls are required and what limited weekly payroll applies). Additional information is provided in the FAQ's and the “Do's and Don'ts” sections of the website. The information contained in these sections is very important for proper completion of the application, whether submitting it online or via paper.

The release and distribution of the CPAP credit is explained on the website. In all instances, the final credit, if any, will be released to the appropriate insurance carrier by the NYCIRB staff. Should you have any questions, please contact your agent, broker or insurance carrier.

New York Compensation Insurance Rating Board

Field Services Division

NEW YORK COMPENSATION INSURANCE RATING BOARD

WHAT IS CPAP?

The New York Construction Classification Premium Adjustment Program (CPAP) is a program implemented by the NYCIRB in 1993 in order to address premium differences between high wage and low wage paying employers in the construction industries.

At that time it was noted that although both high wage and l ow wage employers performed similar work, the high wage employers were paying a disproportionate premium solely due to the wages that they paid their employees. This disproportionate premium payment affected the ability of the high wage paying employers to obtain jobs when their workers compensation costs were higher than those of the lower wage paying employers, despite having similar risk to injury on jobs.

This program attempts to close the premium differential by granting credits on policies based on the hourly wage paid by employers. The higher the wage paid, the higher the credit, which would offset the disparity in payrolls and allow for a more equitable premium charge for those employers in the same industries.

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CPAP --- FAQ

Q.What payroll is to be reported on an application?

A.The program uses the third quarter (July, August & September) payrolls as outlined in the application instructions. Do not use yearly totals.

Q.What maximum weekly payroll ( as def ined by t he Payroll Limitation Law) is us ed on an application?

A.The maximum payroll, as outlined in the appl ication instructions for the third quarter payrolls submitted, is used.

Q.Can the weekly payroll maximums be different on an application and a policy?

A.Yes. The application uses the weekly maximum applicable to the third quarter payrolls submitted while the policy to which the credit applies uses whatever maximum is in effect for the policy period.

Q.Do overtime hours and payrolls need to be reported?

A.Yes. Overtime hours and wages are to be included subject to overtime and payroll limitation rules (i.e. the weekly payroll maximum needs to be reported along w ith the total hours worked including all overtime hours).

Q.Are Wrap-Up jobs to be reported on an application?

A.Yes. An employer's credit is based on payrolls from all policies issued for an insured.

Q.Are the credits indicated in the manual the final credits determined after the calculation?

A.No. T he calculation of a credit is a two-step process. The first part, using the manual credits, determines the Base Credit. T he second part t akes an employer's experience modification loss data ( from the prior year’s experience modification) i nto account t o determine the Net (final) Credit.

Q.Do payrolls for Non-Eligible classification codes need to be reported?

A.Yes. Since any calculated credit applies to the entire policy premium, all payrolls must be included on the application.

Q.Do hours worked need to be reported for non-eligible classification codes?

A.Yes. At least one (1) hour needs to be entered or the calculation will not process.

Q.Does an employer need to be experience rated for the policy period to which any calculated credit applies?

A.Yes. Although an insured may have previously been experience rated, they cannot apply for or receive a credit if they are not experience rated for the policy period to which any credit applies.

Q.When is an application considered too late to process?

A.Applications must be received prior to the expiration date of the policy to which any credit applies. This pertains to all policies including short term policies.

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Q.When is a reapplication considered too late to process?

A.A revised appl ication must be received no later than one (1) y ear after the expiration date of the policy to which the credit applies.

Q.H ow is the payroll treated when an employee works part of a week on a wrap-up job and part of a week on a regular job?

A.The payrolls under each job, and policy, are treated separately. The employee must earn more than the maximum under both or one of the jobs in order to have the payroll limitation apply to either.

Q.Does a calculated credit apply to all of an insured's policies?

A.Yes. As an application must include the payrolls of all of an insured's policies, the credit applies to all of an insured's policies.

Q.What should I do if I receive a zero (0%) credit on the CPAP worksheet?

A.If you receive a worksheet with a zero (0) credit, your application “does not qualify” for one or more reasons. Your carrier will receive a letter from the Rating Board explaining the reason(s) for the non-qualification. Please contact your carrier for clarification on the reason(s) for this condition.

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THE DO’S

AND

THE DON’TS

OF CPAP

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* GENERAL - Online and Paper Application *

DO

•Do read the Help, FAQ and ‘Do's and Don'ts’ before filling out either the online or paper application.

•You must fill in all required fields. The Rating Board will not fill in required fields which are left out or blank.

•Only report 3rd quarter wages and hours ( July, A ugust & S eptember) of t he c alendar year.

•Executive officers are to be listed separately and indicate that they are executives. The hours to enter in this case will always be 520 hours.

•Provide the correct effective date and c arrier. Refer to your WC policy. If you indicate an effective date and carrier which cannot be found in our system, the application will fail to process.

•Apply the proper payroll cap for commercial work only. Check the i nstructions for the proper payroll cap.

•Have a vailable the complete policy number including both the alpha and numeric characters.

•Check the application for completeness and accuracy prior to submitting or entering data online.

•Results are provided to t he insured, authorized representative and the known active carrier. If you are the insured or authorized representative, send the result to the underwriter at your insurance company. The Rating Board will also automatically send a copy to the carrier, but be aware that the specific contact could be different and could then cause a delay in receiving the credit.

•If you receive a CPAP Worksheet with a zero (0%) credit, your application “ does not qualify” for one or more reasons. Your carrier will receive a letter from the Rating Board

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explaining the reason(s) for the non-qualification. Please contact your carrier for clarification on the reason(s) for this condition.

DON'T

•Do not keep resubmitting the same application. If you do the system will reject it saying one already exists.

•Do not use hourly or weekly wages. Only 3rd quarter wages and hours of the calendar year are to be used.

•Do not send incomplete applications. It is your responsibility to submit a complete application.

•Do not include Executive Officers if they are excluded from the policy.

•Do not leave the ‘hours’ field blank. If you have a classification code with wages, you must indicate the hours.

•Do not contact the Rating Board if you are not the authorized contact for the insured. A Letter o f Authority is needed on the insured's letterhead for any other unauthorized contact.

•Do not expect a credit to be processed if it is not received within the proper timeframe (no later than 6 m onths pr ior t o r enewal f or paper applications, and 3 months pr ior to renewal for online applications).

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* Online Application *

DO

•Do read the Help, FAQ and “Do's and Don'ts” before filling out either the online or paper application. You must check the “Yes” box in order to proceed further.

•Complete and fill out everything in Section 1 of the application before proceeding further.

•Complete and fill out applications within 3 months of to the policy renewal date. If the entry is attempted beforehand, it will fail and not get processed.

•Have available and fill out the policy number as it appears on the policy information page

including al pha and nu meric characters, w ith no spaces or punctuation marks. It is necessary that you have the required policy number. Otherwise, the system will not find your policy and you will not be able to proceed.

•Complete and fill out hours if you entered wages next to a classification code. Hours are required for all eligible classification codes for your risk.

•Do double check the online application's figures before submitting. Once submitted for processing, you cannot go back to make corrections.

•Do use 3rd quarter wages and hours of the calendar year (July, August & September) only.

•Do us e the proper payroll cap for t he quarter ( Please refer to the i nstructions for t he proper payroll cap).

•When y ou are instructed t o retrieve your worksheet onl ine, y ou will ne ed to t ype the password exactly how it was provided to you. The password is case sensitive, so it is recommended that you cut and paste it from the email that was sent to you.

•When you receive your CPAP credit and worksheet, send it immediately to your insurance carrier in order to ensure that the credit is received and added t o your policy.

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Although t he R ating Board w ill also send t he worksheet to t he i nsurance c arrier, it is possible there are different contacts.

•Your worksheet is accessible for 30 days from the date of entry/submission. We recommend that when you receive the PDF file worksheet that you save it locally. After one month (30 days) the worksheet is removed from our system.

•Do send a copy of the credit worksheet result to all that need to know of the credit. The person completing the application online will g et a user name and password, which is used to obtain the credit and worksheet. It is that person’s responsibility to provide the credit worksheet result to all necessary and appropriate people.

•For example, do send a copy of the worksheet to:

The insured and insurance carrier if you are the broker filling out the application

The broker and insurance carrier if you are insured filling out the application

The insured and broker if you are the insurance carrier filling out the application

•Contact your carrier if you receive a CPAP Worksheet with a zero (0%) credit, your application “does not qualify” for one or more reasons. Y our carrier will receive a l etter from the Rating Board explaining the reason(s) for the non-qualification. Please contact your carrier for clarification on the reason(s) for this condition. If a correction is needed, you must send in a paper reapplication.

DON'T

•Do not leave any thing blank in Section 1 . This section must be filled out entirely; otherwise you will not be able to proceed.

•Do not fill out applications more than 3 months prior to the renewal. If you attempt to do so, the entry will fail because the experience modification (mod) would not yet be available for the renewal policy.

•Do not enter information for Executive Officers if they are excluded from coverage.

•Do not leave the ‘hours’ field blank if you indicated wages. Hours are now required for all codes including non-eligible codes.