New York Revisits 2007 Reforms to Battle Rising Work Comp Costs

Rising Cost of Workers Compensation for New York Employers

The Public Policy Institute of New York State Inc. (PPI), the research arm of The Business Council of New York State Inc., has 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.

2007 Workers Comp 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.”

Recommendations to Help Remedy System

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,” added 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.”

Author Michael B. Stack, CPA, Director of Operations, Amaxx Risk Solutions, Inc. is an expert in employer communication systems and part of the Amaxx team helping companies reduce their workers compensation costs by 20% to 50%. He is a writer, speaker, and website publisher.  www.reduceyourworkerscomp.com. Contact: mstack@reduceyourworkerscomp.com.

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