A new state law that spurred the dissolution of several self-insured group trusts has prompted their third-party administrator of workers’ compensation coverage in Latham to layoff 57 jobs in New York and Vermont.
First Cardinal today notified employees about a restructuring initiative that will see it cut 45 jobs in Latham and 12 at its satellite office in Williston, Vt. The company, which has not had to pursue staffing reductions since its founding in 1994, largely blamed the cuts on a legislation passed last summer that changed the way self-insured groups are regulated.
“I am saddened to lose talented, dedicated insurance professionals in this workforce reduction, the first in our company. Looking forward, First Cardinal retains a healthy self-insurance group business in workers compensation for its inactive groups in New York state and also for six groups in Massachusetts and New Hampshire,” First Cardinal President and Chief Executive Office Richard Flaherty said in a statement.
On Dec. 31, 13 of the 14 self-insured groups First Cardinal administered in New York dissolved because the board of trustees believed the new law made their program uncompetitive. The Latham firm managed $166 million in premiums for those 13 groups, which consisted of over 7,000 New York business.
First Cardinal is cutting 27 percent of its work force in Latham, where it employs 164. The Williston office employs 26. The layoffs affect workers at both First Cardinal and its CardinalComp affiliate. The company will pay affected workers’ salary and health benefits through April 1 and for four weeks after that date.
Another factor behind the layoffs are new partnerships with other insurance companies, which reduced the need for some CardinalComp back office workers.