For Release — October 31, 2012
Workers' comp costs remain a barrier to economic growth and job creation in New York
ALBANYThe Public Policy Institute of New York State Inc. (PPI), the research arm of The Business Council of New York State Inc., today released a new study, Workers' Comp Costs - Revisiting the Reforms, that examines the rising cost of workers' compensation for New York employers and how costs have been influenced by 2007 legislative reforms.
In Revisiting the Reforms, PPI explores several provisions of the 2007 workers' comp reforms, including:
- Increasing and indexing the maximum weekly benefit.
- Capping non-schedule permanent partial disability payments.
- Closing the Second Injury Fund.
- Implementing medical treatment guidelines.
- Instituting an expedited hearing process.
- Promoting return to work rates.
"The crux of the 2007 workers' compensation reforms in New York in terms of added benefits to employees - an increase in the maximum weekly benefit - was immediately implemented. However, major provisions intended to result in real cost savings for employers were developed and implemented years after the legislation was approved, and in some cases, are still not yet in full effect," said Heather Briccetti, president and CEO of The Business Council. "Our concerns include delays in the classification of claims that would be subject to durational caps, and a substantial increase in the cost of schedule loss-of-use awards."
After speaking with numerous workers' comp professionals, PPI has formulated a list of recommendations to help remedy current inequities in the system. Such measures include:
- Modernizing the rating system through which schedule loss-of-use awards are determined by updating applicable medical treatment guidelines.
- Eliminating or modifying the indexing of maximum weekly benefits to control growing program costs, allow for future necessary program reforms and reduce any unintended disincentive for claimants to return to work.
- Limiting the duration of temporary disability benefits by assuming, with a rebuttable presumption, that maximum medical improvement is reached two years from the date of an accident to help incentivize quicker classification.
- Mandating the use of employer provider panels of health care professionals for the first 90 days of treatment.
- Eliminating the Aggregate Trust Fund deposit mandate for commercial carriers.
"New York employers and taxpayers face the fifth highest overall workers' compensation costs in the nation and must pay five times the national average to fund the system," said Paul Jahn, executive director of the Workers' Compensation Policy Institute. "The Public Policy Institute's comprehensive look at Workers' Compensation in New York details the many problems confronting employers and taxpayers and lays out a sensible agenda for reform."
"I highly recommend the Public Policy Institute publication, 'Revisiting the Reforms,'" said Fred Buse, managing director at the Schwartz Heslin Group. "The report provides a factual analysis of the implementation of the 2007 reforms and lays out a blueprint of what still needs to be accomplished, including: Modernizing the state's schedule loss-of-use awards; implementing a training program for physical and occupational therapists; limiting the duration of temporary total benefits; utilizing assigned, experienced providers for the first 90 days following an accident; eliminating the required deposit into the Aggregate Trust Fund by even highly rated insurers; and more."
"The New York State Workers Compensation System, in spite of considerable effort at reform, continues to have defects and deficiencies which frustrates all stakeholders and participants working within this forum," said Dr. Warren Silverman, medical director of Access Health Systems and president of the New York Occupational and Environmental Medical Association. "The Public Policy Institute should be commended for bringing some of the issues, being talked about in small venues, by knowledgeable participants, to the forefront for general discussion and action. In their analysis and presentation, they offer an insightful menu of 'hotspots' ripe for further improvement."
"The Business Council looks forward to working with the Governor and the Legislature in 2013 to implement these additional reforms necessary to assure appropriate benefits to injured workers and affordable costs to employers," added Briccetti.
The Public Policy Institute of New York State, Inc. is a research and educational organization whose purpose is to formulate and promote public policies that will restore New York's economic competitiveness. The Institute accomplishes this mission by conducting timely, in-depth research addressing key state policy issues. Founded in 1981 and affiliated with The Business Council of New York