The Business Council strongly supports the inclusion of a provision to the final budget agreement that would clearly reflect the intentions of the 2007 workers’ compensation program reforms in instituting a durational cap on permanent partial disability.
This proposal will help control workers’ compensation costs, which – driven by a significant increase in maximum benefits – are again becoming un-competitively high for New York employers.
In the 2007 comprehensive workers' comp reform legislation, organized labor and business agreed that, in addition to the more than doubling the benefits to injured workers, in order to lessen the financial burdens of the workers' comp system on employers, a duration limit on non-scheduled permanent partial disability awards of up to ten years would be imposed.
The cost-savings based on these caps have not never been realized and has been undermined by a significant increase in the average time it takes for maximum medical improvement classification (prior to any cap) to as high as 8 years.
The delay in classification is not based in any way on medical reality, rather a desire to prolong temporary benefits before the imposition of a duration cap. In reality, the average time it takes any patient to reach maximum medical improvement is under 6 months and in the most dramatic cases, under 2 years.
In order to start getting the run-away costs of the workers’ compensation system under control, the Governor and the Legislature must address the issue of classification. The Business Council proposes a statutory amendment that reflects medical practice in every arena, and in every state except New York, that the achievement of maximum medical improvement occurs well within two years from the date of injury. Accordingly, any payment of temporary disability payments made to an injured worker after two years from the date of injury should be credited to the employer in its payment of PPD claims under the 10-year durational cap.
Such a provision would be consistent with the spirit and intent of the agreement made by organized labor and business that has yet to be fully adhered to. The Business Council urges the adoption of a provision by the Governor, Senate and Assembly that would close this glaring loophole in the 2007 reforms and help bring the rising costs of workers’ compensation under control.