PRIORITY
ISSUE: Workers’ Comp Reform
Status:
S. 5064 (Meier) is The Business Council's reform bill. It
has been referenced to the Labor Committee |
|
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.
