New York has the fifth highest workers’ compensation premiums among all states and the District of Columbia in 2012, down from 13th highest in 2010, according to a report on premiums by the Oregon Department of Consumer and Business Services.
The 2012 median rate index is $1.88 per $100 of payroll, 8 percent less than the 2010 rate of $2.04 per $100 of payroll, the study found. New York’s rate is 150 percent of the median at $2.82, up from $2.34 in 2010. Oregon’s is 84 percent at $1.58 for every $100 of payroll. The lowest rate in the country is in North Dakota is for North Dakota, which has a rate of $1.01, and the highest is in Alaska, whose index rate is $3.01.
New York is one of seven states that have an index rate of $2.50 to $2.99. Eleven are in the $2.00-$2.49 range; 22 are in the $1.50-$1.99 range and 10 are less than $1.50, the report said.
The study’s findings illustrate the failure of workers compensation reforms adopted in 2007, under then-Gov. Eliot Spitzer, said Paul Jahn, executive director of the Workers’ Compensation Policy Institute. The institute is the research affiliate of the Public Employer Risk Management Association.
“Clearly the 2007 reforms, which were intended to reduce overall costs in New York State, have not succeeded in doing so,” Jahn wrote in a blog post last week, adding that additional cost-savings measures are needed.
Jahn said there are several reasons for the premium increases in New York, including that not all guidelines for controlling use of medical treatment in the workers compensation system have been published. There are no regulations for using narcotics for pain management. A recent study by the Workers’ Compensation Research Institute found that New York uses narcotics for injuries involving pain for longer periods than all states except Louisiana, Jahn noted.
The 2007 reforms boosted the maximum indemnity benefit paid to injured employees. It had been set at $400 for 15 years, and the changes called for increasing the maximum benefit until it equaled two-thirds of the state’s average weekly wage adjusted annually. The current maximum benefit is $792.07 a week.
At the time of the 2012 Oregon study, New York had not decided how to apply caps on the duration of permanent partial disability claims, Jahn said. Guidelines have since been published that rely on evidence-based medical opinions and give judges broad discretion in deciding these claims. Savings from the cap are supposed make up for the increase in benefits paid to injured employees.
This is a chart from the Oregon study: