What's New

Zack Hutchins
Director of Communications

May 29, 2003

Council opposes bills that would change the nature of workers' comp; eyes reform bills

Amid reports that the state is considering a significant increase in average workers' comp costs, The Business Council is stepping up its efforts to highlight the need for cost-cutting reforms and to oppose actions that would worsen the burden of comp costs.

"New York's consistently above-average burden of workers' comp costs remains one of the top concerns of the business community," said Daniel B. Walsh, president and CEO of The Business Council. "The high cost of comp discourages employers and workers alike and drives businesses and jobs out of the state."

The Compensation Insurance Rating Board (CIRB) has asked the state Insurance Department to raise compensation rates by about 12.5 percent, according to a story by the Gannett News Service. The department is expected to issue its final ruling on rates in July. New rates would take effect in October.

Premium rates in New York haven't been raised since 1994. But they were still 28 percent above the national norm in 2002 and the eighth highest of 45 states surveyed by Actuarial and Technical Solutions, a Suffolk County firm that tracks the trends, Gannett News Service reported.

The Council has long argued that New York's above-average workers' comp costs are a significant competitive disadvantage for the state. Before the reforms of 1996, these costs were some 56 percent above average. By 2000, four years after the reforms, these costs had declined significantly. But it appears that New York's comp costs remain significantly above the national average.

The Council is urging lawmakers to consider reforms that would make New York more like many states which have found a way to offer both higher benefits for the injured and lower costs for employers.

New York has already seen how well-targeted reforms can help contain comp costs.

As it advances the case for reform, The Council is also opposing workers' compensation bills that would negatively change the nature of worker's compensation law while driving employers' costs significantly higher.

One bill (A.7493-Weinstein, S.5006-DeFrancisco) would let a sick or injured employee seek damages from his employer above and beyond workers' compensation if a third party sued in connection with an original injury goes bankrupt.

But this bill would undermine the very purpose of workers' compensation, said Kerry Kirwan, The Council's legislative analysis specializing in workers' compensation. Under workers' compensation law, an employer is absolutely liable for all medical benefits given to a worker injured on the job. In return, workers may not sue their employers.

A second bill (A.7177-Brodsky, S.3321-LaVelle) would let any worker who ever spends any work time outside claim benefits if they get Lyme disease.

"Workers' compensation traditionally requires a well-defined relationship between the disease contracted and the nature of employment," Kirwan said. This bill would set a dangerous precedent in the state by changing the standards and criteria which define an occupational disease."

The third bill (A.7209-John,S.4210-Velella) would create an administrative position at the Workers' Compensation Board to handle all billing disputes below $500 that arise between medical carriers and insurance providers.

The Council opposes the bill because it would gives insurers no way to dispute medical providers' decisions and bills about services provided.

Such disputes are now heard and resolved by a three-person panel in a process that allows all sides to argue their case.

The bills were reviewed at a May 22 The Council's Workers' Compensation Committee meeting in Albany. Representatives of 25 New York State businesses attended the meeting, which addressed workers' compensation-related legislation and concerns.

The Council's Workers' Comp Committee has been working for more than a year to craft a bill that would address the priorities of the business community.

In addition to discussing current legislation the meeting also featured three guest speakers.

Jim O'Bryan and Annette Maye from International Paper, Inc. discussed one workers' compensation case which has extended over 12 years and, to date, cost more than $950,000 to manage.

Renee Heitger, an attorney from the Buffalo-based Hamberger and Weiss insurance defense litigation practice, spoke on the Health Insurance Portability and Accountability Act (HIPPA).

HIPPA, a federal law that took effect on April 14 of this year, seeks to ensure privacy and confidentiality of health-care records. Heitger offered advice to the attendees on how to comply with new federal regulations when investigating workers' compensation claims, which may require employers to obtain copies of the injured worker's medical records.