Director of Communications

ALBANY—Workers' compensation costs in New York State continue to drop relative to those in other states, but are still higher than average, according to authoritative new figures.

Average compensation costs for manufacturers in New York were 20.4 percent higher than the national average as of January 1, 1998, according to Actuarial & Technical Solutions, Inc., a consulting firm based in Ronkonkoma, Long Island.

Three years earlier, the company calculated that workers' compensation costs in New York were 57 percent above the national average. By 1997, rates in New York had fallen to 28.7 percent above average. Compensation rates in the state are now 10th-highest of the 44 states included in the study, compared to second-highest in 1995 and eighth-highest last year.

Meanwhile, wage replacement benefits in New York were 30.2 percent higher than the national average as of January 1998, according to the study.

Average workers' compensation premiums in New York have dropped 33 percent in the last three years as a result of major reforms Governor Pataki proposed and the Legislature approved in 1996. The Actuarial & Technical Solutions figures do not take into account the average 6 percent reductions in New York rates, or changes in other states' costs, that take effect this year. Employers in the Empire State suffered double-digit rate increases each year from 1988 through 1993.

"Thanks to the reforms enacted by Governor Pataki and the Legislature, we've made tremendous progress in controlling workers' comp costs," said Daniel B. Walsh, president of The Business Council. "But our costs are still higher than those in most of our key competitor states, as the competition reduces costs, too."

Workers' compensation costs in Virginia, New Jersey and Illinois are below the national average, for instance; those in Pennsylvania, Connecticut, Massachusetts and Michigan are above average but still lower than rates in New York.

Nationwide, the average cost of workers' compensation insurance for manufacturers fell for the fourth year in a row from 1997 to 1998, dropping 12 percent, the Actuarial & Technical Solutions study found. Forty of 44 states studied saw rates decline over the year; Pennsylvania, New Mexico, Utah and Arizona led the way with reductions of 25 percent or more.

The Business Council has urged the Governor and the Legislature to enact further major reforms, including use of standardized medical guidelines and time limits on awards for permanent partial disability.

Such issues "can be critical factors in controlling workers compensation costs," the Actuarial & Technical Solutions study says.

The costs of workers' compensation in the study are based on a composite payroll distribution by class for more than 60 classifications in the manufacturing sector. Six states that provide workers' compensation only through a state fund were excluded from the analysis of costs.

Note: The report Workers Compensation State Rankings is available from Actuarial & Technical Solutions, Inc., at 516-471-8655.

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