A proposed rate increase in New York's workers' compensation rates should focus policymakers' attention on the need for further reform, according to Elliott Shaw, director of government affairs for The Business Council.
Business is concerned about "the potential return to doubledigit rate shock," Shaw said in prepared testimony to be delivered today at a hearing of the New York Compensation Insurance Rating Board (NYCIRB).
That possibility, he added, makes it more important than ever that lawmakers pass new reforms to supplement those enacted in 1996. The 1996 reforms limited the ability of third parties to sue New York State employers, mandated safety programs for some employers based on safety records, created new antifraud protections, and helped reduce costly delays in the workers' comp system. Workers' compensation costs declined, and New York State's business climate has improved, as a direct result of the reforms, Shaw added. Nonetheless, workers' compensation costs in New York State remain 20 percent above the national average, 10th highest among 44 states evaluated in a recent measurement. Shaw said lawmakers should enact two more critical reforms: a cap, at seven years, on permanent partial disability benefits; and adoption of objective medical guidelines to determine the degree of disability in these cases. Only nine states have no cap on permanent partial disability cases, he noted. He cited three states with caps-Connecticut, Florida, and North Carolina-where approximate costs per case ($21,000, $30,000, and $22,000, respectively) are significantly lower than New York's costs per case ($48,150).