New York State’s workers’ compensation program needs immediate reform to curb high costs and help employers, Business Council President and CEO Daniel B. Walsh told Governor Pataki in a May 13 letter.
“The state's business community needs real reforms to workers' comp and they need them fast,” Walsh wrote. “Your leadership has made the difference on so many tax and economic issues in the past decade. We are asking for that leadership once more.”
The New York Workers' Comp Insurance Rating Board has filed another double-digit rate request, the letter said. “The request from the Rating Board presents a catch-22 — either the request is granted in whole or in part and New York businesses will continue to pay significantly above the national average; or the department will again reject the rate request and commercial insurers will continue to write less coverage in the state.”
The Rating Board has also asked for an “alarming” increase
in assessment ratings, Walsh wrote. The board would like to see
an increase from 15.1 percent to 17.5 percent.
“It cannot stand,” Walsh wrote. “We request an
immediate freeze on the assessment level and a thorough investigation
of what is driving these numbers.”
The rate-filing system in New York has obscured one fundamental fact: employers who do not purchase workers' comp insurance coverage, but rather are self-insured, have already experienced sharp increases in the cost of comp coverage over the past few years, the letter continued. “This situation is eerily similar to what occurred in California, leading to a gubernatorial initiative to make fundamental changes to their comp system.”
“Company after company, who are self-insured for workers' comp, have cited the excessive costs of workers' comp as the most significant cost-differential of doing business in New York State versus virtually any other state where they have a facility,” Walsh wrote. “The pronouncements from the Insurance Department about rate cuts and rate stabilization bear no resemblance to the real-world experience these employers are feeling.”
The 1996 reforms of workers’ compensation helped employers, Walsh said. “But it’s time for real reform once again.” Walsh suggested three steps the Governor could take immediately, including:
- Re-submit Program Bill #81 from 2004 and make comp reform a
condition of legislators leaving Albany for the summer.
- Support S.3531 (Winner)/A. 6703 (Weprin) to decrease the assessments
for the special disability fund from 150 percent to 110 percent.
- Initiate a thorough and expeditious investigation of what is driving the costs behind the assessments.
“The high costs of comp coverage in New York State, and the
solutions for fixing them, are well-documented,” Walsh concluded.
“It is time for action. The Business Council is ready to assist
you in this effort. I assure you we will stand right behind you
every step of the way.”