ISSUE IN BRIEF:
Workers’ Comp Reform
Staff
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Workers' compensation
costs in New York remain significantly above national averages - even with
its relatively low maximum benefits - and continue to be a major factor
affecting the state's competitiveness.
The Business Council supports
legislation to fundamentally reduce costs. There are four major changes
which need to be made:
- durational
limits for permanent partial disabilities;
- implementation
of objective medical guidelines;
- old
age social security and employer-sponsored pension benefit offsets;
- changing
scheduled loss of use awards.
Business Council Priorities
New York State is often cited as a high-cost and
low-benefit state. Permanent partial disabilities are a category of injured
workers who can still perform work, although potentially different work
from what they were doing. The maximum benefit for permanent partial disabilities
is $400 a week. While lower compared to other states, New York claimants
collect benefits for a vastly longer period of time. Permanent partial
benefits are frequently awarded for a lifetime. Thirty-seven states have
a durational limit on the number of weeks that claimants can collect for
permanent partial disability. New York has no limit.
Data on permanent partial
disabilities in New York shows that such claims account for approximately
13.6 percent of the claims in the system. However, these same disabilities
account for over 77 percent of the costs because the benefits are often
paid as a lifetime award. A defined schedule of 500 weeks would
put New York in line with the rest of the country.
Objective medical guidelines
are written guidelines that spell out the conditions needed to meet certain
criteria to determine medical impairment. Forty-two other states use a
form of objective medical guidelines to determine medical impairment. Thirty-nine
of those states use the AMA guidelines. New York does have objective medical
guidelines published by the Workers' Compensation Board in 1996. However,
the guide's use is not formally adopted in statute and is not required
to be used in evaluating the degree of medical impairment. The guides are
designed to eliminate the possibility of radically different conclusions
by different medical professionals. Even the Workers' Compensation Research
Institute noted, in a study of New York's system, that the state's guidelines
for rating non-scheduled partial injuries "provide general guidance at
best."
Under current law, if
an employee is injured and receives a schedule loss of use award for 20
weeks and remains out of work for only eight weeks they are still entitled
to collect benefits for the entire 20 weeks at the maximum partial disability
rate irrespective of degree of disability or wages paid after return to
work. The legislation calls for scheduled loss of use awards that
do not relate to actual lost time from employment to be paid at one half
the maximum weekly benefit.
Workers' compensation
was never intended to be a wage supplement for retirement or to replace
general health insurance. However, more and more employers are finding
that employees are using the workers' compensation system to provide supplemental
wages when they retire. We support an offset provision when a person becomes
eligible for "old age" social security benefits. Fifty percent of the benefits
commonly referred to as "old age" social security benefits will be credited
against the amount of workers' compensation benefits due. Benefits from
an employee pension benefits plan that has been funded fully by the employer
should also be credited against workers' compensation benefits.
The Business Council will vigorously
oppose any measure that seeks to increase workers' comp benefits without
reforms.
