2017 Workers’ Compensation Reform
Lev Ginsburg, Director of Government Affairs
May 15, 2017
After making workers’ compensation reform the top priority of The Business Council’s legislative agenda, we are pleased to announce that the FY 2017-18 State Budget included language significantly reforming New York’s workers’ compensation system that will create meaningful savings for all employers in the state. The bill was approved on 4/10/17. Like all reforms of this nature, there was significant negotiation among stakeholders, the Administration and the legislature. We would like to give special thanks to the state Senate, particularly Majority Leader Flanagan and Senators DeFrancisco, Akshar and Amedore for making comp reform a top priority of the Senate and helping make it a reality. We also want to thank Assembly members McDonald and Woerner for standing firm in their house and consistently calling for relief. The cost-saving highlights of reform include:
- Capping classification of Maximum Medical Improvement at 2.5 years by providing a credit to employers for temporary payments beyond the threshold, which will apply to all claims for injuries after 4/10/17;
- The mandated development of new Impairment Guidelines for use in determining scheduled loss of use awards, to be adopted by 1/1/18, that will adhere to modern medical evidence and modern medical outcomes, and apply to all SLU determinations made after their adoption;
- The issuance of a pharmaceutical formulary by the Workers’ Comp Board by 12/31/17.
The reform also includes provisions designed to enhance coverage for injured workers by:
- Decreasing the threshold for the permanent partial disability cap “safety net” from an impairment of 80% to 75%;
- Removing the requirement that an injured worker, who was entitled to benefits and attached to the workforce at the time of classification, demonstrate attachment to the labor market;
- Expedite hearings to 45 day from date of request by injured workers’ who have not yet received any payment of benefits;
Additionally, there are provisions to:
- Create a panel to study independent medical examinations;
- allow the state to purchase assumption of liability policies to manage the costs of closing Special Funds;
- Create minor modifications to NYCIRB’s public reporting and recertify NYCIRB as the rate setting organization until 2028;
- Establish performance standards for penalties and assessments on carriers and self-insured employers.
These measures have already created significant savings in year-one with a NYCIRB requested loss-cost of -4.5% for all policies beginning 10/1/17 and will continue to provide premium savings as Impairment Guidelines go into effect next January, creating an even greater annualized savings of hundreds of millions of dollars into the future. We want to thank our members and the more than 65 employer organizations and hundreds of other employers who joined our efforts to make long-sought reforms a reality.