Reforms made to the state workers’ compensation system in 2007 to improve efficiency, increase premiums for injured workers and reduce employer premiums have not led to savings for employers because they have been implemented too slowly, according to a study released today by the Public Policy Institute of New York State, the research arm of the state Business Council.
Measures included in the reform that were intended to save employers an estimated 10 percent on workers compensation “have not been realized,” the report said. In fact, workers’ compensation costs have been rising, it said.
The report cites rough estimates by the state Workers’ Compensation Board that there were about 240,000 claimants receiving benefits in 2011, and the total cost of the system is an estimated $6 billion, about the same as it was before the 2007 reforms.
“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,” Heather Briccetti, president and CEO of the Business Council, said in a statement. “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.”
In addition to increasing and indexing the maximum weekly benefit, the reforms capped non-schedule permanent partial disability benefits, closed the Second Injury Fund, implemented an expedited hearing process and medical treatment guidelines, and promoted return to work rates.
The Public Policy Institute is recommending measures to help remedy inequities in the system. They include eliminating or modifying the indexing of maximum weekly benefits to control growing costs, allowing for future program reforms, mandating the use of employer provider panels of health-care professionals for the first 90 days of treatment and limiting the duration of temporary total benefits.
“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,” Paul Jahn, executive director of the Workers’ Compensation Policy Institute, said. “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.”
Bricetti said the council wants to work with Gov. Andrew Cuomo and the Legislature in 2013 to adopt additional reforms.