ALBANY—New York State's workers' compensation system needs fundamental reforms that will rein in the state's above-average cost without undermining essential benefits, The Business Council told the state Legislature today.

"New York helped reduce its costs by enacting a first round of essential reforms in 1996. It is time to get back to work on the next round of changes as called for by the Governor in his major announcement yesterday at our Small Business Day," Daniel B. Walsh, president of The Business Council, said at a hearing of the Senate Labor Committee.

New York has some "major" problems with its workers' compensation system, Walsh told the committee. "By every measure we have seen, New York's costs of workers compensation are above the national average-and by some measures, our costs are among the very highest in the nation.”

The high costs of workers' compensation insurance are a heavy burden for businesses to carry, and often encourage businesses to relocate out of state, he said.

"We know many of the reasons our costs are so high and they can be fixed," Walsh said. "New York has not enacted fundamental reforms that other states already have in place - reforms that rein in costs without undermining essential benefits."

Walsh asked the committee to consider several key reforms, including:

• Providing 10 full years of workers' comp benefits to workers in cases where the worker will have an opportunity to retrain for gainful employment.
  
  "The goal is essential: to give workers both ample benefits and sufficient time to seek retraining to enable them to return to work," Walsh said.
  
  
• Providing for Social Security and pension offsets. This would provide an offset in workers' compensation cases when workers receive Social Security and/or employer sponsored pension benefits.
  
  "Our members are seeing a dramatic rise in employees who file workers' compensation claims when they near retirement age," Walsh said. "The workers' compensation system is not designed to be a supplement to retirement."
  
  
• Awarding workers in scheduled cases only the benefits they collect while they are out of work. Currently, employees who receive scheduled awards - for example, a certain number of weeks' pay for a finger injury - collect benefits after they return to work.
  
  
• Adopting objective medical guidelines to determine the degree of disability in permanent partial disability cases. Guidelines should consider anatomic and functional disability in permanent partial disability cases and should provide a standardized, replicable method for physicians to use to determine comprehensive, "whole-person" impairment percentages, Walsh said. "Forty-six states use objective medical guidelines, which ensure that medical providers evaluate similar cases using consistent criteria," he added

The Council's testimony also reminded the committee of the fiscal dangers associated with some workers' compensation proposals.

"The bill introduced by Senator Velella and Assemblymember John would increase the burden on employers without addressing any of the underlying factors driving higher costs," Walsh said. "In fact, it would make New York's cost burden worse by 25 percent or more."

"Thank you for initiating an important process to determine whether 2004 can see the enactment of badly-needed workers' compensation reform that can provide greater relief to the state's business community and greater security for people who suffer injuries in the workplace," Walsh said.

For the full testimony, visit www.bcnys.org/inside/wc/032404wctest.pdf.