New York: Study finds reforms have increased benefits, significantly reduced costs
The New York State Workers' Compensation Board recently released a study that examined the impact of the reforms on the state's system. Zachary S. Weiss, chairman of the board, said the findings indicated substantial improvements for employers and injured workers.
"In 2007, New York saw sweeping statutory reform in the workers' compensation system," he said. "Since then, benefits have increased while costs have decreased; injured workers are getting benefits faster; and fraud is being rooted out."
Among the highlights of the report, researchers found that:
- Benefits increased for first time in more than a decade. For 15 years, the maximum weekly benefit for injured workers was fixed at $400. However, under the reform legislation, the maximum weekly benefit was increased to $500. In addition, the law provided for steady increases until 2010, when it will be indexed annually at two-thirds of the average weekly wage in New York. According to the New York State Department of Labor, the 2007 average weekly wage for New York was $1,141. If this remains unchanged until 2010, the maximum weekly benefit will increase to approximately $760.
- Employer costs were reduced significantly. According to the report, New York had one of the most expensive workers' comp programs in the country only two years ago. Because of the reforms, Weiss said the state is now far more competitive. In a recent study by the Oregon Department of Consumer and Business Services, researchers found that employers in New York state's voluntary market pay, on average, the 19th highest workers' comp premium rates in the nation. This is down from the 10th highest rates in 2006 and doesn't include a recent 5 percent rate reduction. New York now ranks below neighboring states Pennsylvania, New Jersey, Vermont and Ohio.
- Claim procedures were streamlined. Prior to the 2007 reforms, researchers found that it took an average of more than 200 days to resolve disputed claims. Now, Weiss said the goal is to resolve these cases in 90 days. In addition, the board voted in September to adopt new regulations permanently creating a streamlined docket to resolve controverted claims. Weiss said this vote marks a great leap forward for injured workers, who will now have a regulatory guarantee that they will receive their needed benefits more quickly.
Recent reforms addressed self-insurance programs. Over the past year and a half, the board has taken over the administration of a number of self-insured group trusts in New York because they had become insolvent. Weiss said these defaults have placed a considerable strain on the whole self-insured community. However, in June, Gov. David Paterson signed legislation to improve the transparency and strengthen regulation of group self-insured trusts through regular review of trust finances by independent actuaries, heightened penalties for misconduct, and new procedures to ensure that underfunded trusts become fully funded.
"The same spirit of collaboration that helped craft the 2007 reforms also helped see the board and the state through recent difficulties within the group self-insurance program," Weiss said.
The report found that the legislation has already helped strengthen and stabilize the self-insurance industry in New York. Because of this new law and other recovery and cost containment efforts, Weiss said the board was able to reduce the annual self-insurers' assessment amount by half -- from the previous estimate of $66 million for 2008-09 to approximately $33 million.
Weiss said that despite the state's achievements, there is much left to accomplish.
"My hope is it will also help advance the dialogue on workers' compensation in New York and create a path for future successes," he said.
Weiss said return-to-work initiatives and medical treatment guidelines are among the areas that will likely see improvement in 2009. The board, in partnership with the New York State Department of Labor, is determining the next steps for implementation of the administrative recommendations in the return-to-work report that was issued in March 2008. In addition, the Superintendent of Insurance submitted the first set of recommended treatment guidelines for the lower back, shoulder, cervical spine and knee in late 2007. Weiss said the board is drafting text to adopt the treatment guidelines and the implementation standards as regulations.
January 12, 2009
Copyright 2009© LRP Publications