New York has made progress cutting workers' compensation costs through reforms - and more reforms can reduce costs further, Business Council President Daniel B. Walsh told the state Workers' Compensation Board (WCB) July 17.
Walsh was invited to address the full board to share the perspectives of the business community on the state of workers' comp in New York.
Reforms in 1996 began a period of decline in New York's costs compared to the national average, Walsh noted. These reforms limited the ability of third parties to sue New York employers, mandated safety programs for some employers based on safety records, created antifraud protections, and helped reduce delays.
As a result, overall comp costs fell. One study said that costs that had been about 57 percent above the national average fell to about 21 percent above average in 1999. And premium costs have declined about 40 percent in recent years.
And in July, the state announced that overall average costs should decline about 1.8 percent in the year beginning Oct. 1.
But overall costs, although lower, are not yet low, Walsh noted. He noted that increases in assessments - a surcharge that all employers pay - have risen enough to offset much of the cuts to premiums.
"New York employers often are dismayed to see premiums decline but total costs stay level or increase" because of assessments, Walsh said.
The projected decline in costs next year is especially welcome news because it reflects the first decline in assessments since 1998, he added.
To further cut comp costs, Walsh said, New York should:
- Cap partial disability payments, which 42 other states already do. These cases account for more than half of New York's comp claims costs.
- Use objective medical guidelines to determine the degree of disability in these cases. Forty other states have already adopted this reform
- Reform state Labor Law to permit employers to introduce evidence of workers' negligence in lawsuits stemming from injuries at worksites. Currently, employers are deemed absolutely liable for any worksite injury, regardless of the circumstances.
"Other states are also working to cut their comp costs, so the bar is constantly being raised," Walsh said. "New York must compare itself not just to its own past, but to other states' present records."
Walsh praised WCB's recent administrative and technological improvements, including antifraud initiatives, the opening of new offices statewide, and new technologies that make it easier for interested parties to access case records and conduct business. The board's "Electronic Case Folder" initiative received the Government Technology Leadership Award for 2000 from Government Executive Magazine.