Workers' Comp Reform Debate Heats Up in Albany
Workers' Comp Central is reporting today (free registration required) that the battle lines are being drawn in the upcoming debate over workers' compensation reform in Albany. The major players are the New York State AFL-CIO, NYCOSH and the New York Workers' Compensation Alliance (WCA) representing the interests of severely injured workers, the New York State Business Council representing the interests of employers and of course, key policy advisors to Governor-elect Spitzer. Absent from the debate thus far is the insurance lobby, whose interests are often in conflict with both employers (premium gouging) and workers (outrageous claims handling).
One of the major stumbling blocks will be how workers with permanent partial disabilities (PPD's) will be treated in the future. Because of age and vocational factors, many of these workers are effectively driven from the workforce due to their injuries (try applying for a job after stating you have a bad back due to an old workers' comp injury. In the real world, you don't get the job if you are honest).
New York has a long and proud history of taking care of severely but partially disabled workers. It would be a sad day, and even worse public policy, to require workers to be "invalids" in order to collect compensation benefits for life. If hard "caps" are placed on PPD's like the Business Council is advocating, New York's cities and counties will see an explosion in the welfare rolls. Thankfully, when candidate Spitzer met with the Workers' Compensation Alliance last year, he unequivocally indicated his support for not capping permanent partial disabilities.
Below is the entire text of the Workers' Comp Central article:
New York -- Spitzer Expected to Make Sweeping Changes in NY Comp: Top [12/11/06]
An alliance of New York attorneys and other advocates representing 200,000 injured workers called for sweeping reforms in the state's workers' compensation system Friday and said it has high hopes for Gov.-elect Eliot Spitzer."We think he's going to take a hard look at insurance companies before he proposes any major change in workers' compensation," said Troy Rosasco, who co-chairs the New York State Workers' Compensation Alliance.
"There are already meetings going on, and the time will be sooner rather than later," Rosasco said. "I would think we would have substantial workers' comp reform of some sort or another within the first six months of the Spitzer administration."
Spitzer's transition team did not respond to a request for an interview Friday. And the veteran state attorney general is keeping his own plans for workers' compensation reform close to his vest.
He has told participants in a series of meetings intended to forge a compromise among employers, claimants' attorneys and the unions that they won't get a preview of his plans until his inauguration next month.
But Spitzer gained national attention with a string of major settlements with insurers over allegations of accounting irregularities and the payment of illegal contingent fees to secure business.
Most notably, Spitzer signed a record-setting $1.65 billion settlement with American International Group in February, after he accused the insurance giant of cooking its books to smooth out quarterly financial earnings reports.
That surpassed his $850 million agreement with Marsh & McLennan over its use of continent commissions paid to brokers.
And the AIG case led to the ouster of former company CEO Maurice "Hank" Greenberg and his chief financial officer, Howard Smith, as well as a string of ongoing civil and criminal cases.
"He's a good sheriff of the industry," Rosasco said.
With the New York State Assembly set to return to Albany in January, Spitzer has promised to call a summit meeting of shareholders in workers' compensation.
Reforming the system was a major part of his campaign, along with rescuing the beleaguered economy of upstate New York.
The state of the economy has pitted the alliance against the Business Council of New York State and its affiliate, New York Workers' Compensation Action Network (NYCAN).
NYCAN has called on Spitzer to impose the state's first cap on permanent partial disability, saying the PPDs account for 15% of the state's workers' compensation cases and 75% of the expenditures.
The alliance is opposing the caps and pushing hard to raise the maximum weekly benefit for injured workers, which has been capped at $400 since 1992.
On Friday, the alliance called for increasing the maximum benefit to two-thirds of the state average weekly wage. Suggesting a phased-in payment schedule, the alliance also is seeking to raise the minimum weekly rate from $40 to $120.
The alliance wants to raise the benefit amount under the state's Disability Benefits Law to one-half the claimant's average weekly wage without a maximum limit. And it wants Spitzer and lawmakers to require the state Workers' Compensation Board to set a future revaluation date for workers with PPDs, at which time the worker would have to demonstrate an attempt to reenter the labor market.
The proposals released Friday would increase the dollar limit for required pre-approval of medical services from $500 to $1,200 and require private carriers to pay for medical care while workers' compensation claims are pending.
Finally, the proposals would abolish the Compensation Insurance Rating Board and transfer the job of ratemaking classification to state government.
"The biggest issue and the biggest stumbling block we will face in the upcoming negotiations is how injured workers with permanent partial disabilities are treated," Rosasco said. "If he (Spitzer) were to implement a cap, those who remain out of work will become wards of the state welfare system."
Citing upstate New York's depressed economy, NYCAN said in is recently call for action from Spitzer that brokering a compromise on workers' compensation is "the best way to send a signal that he will boost upstate's fortunes."
NYCAN warned that New York has the second-highest average workers' compensation claims in the nation despite the fact that its maximum weekly benefit hasn't changed in more than a decade.
The group said employers' costs are 15% above the national average. Average claims are more than $16,000, up from $11,793 two years ago.
The group called for limiting PPD awards to 10 years.
Current Gov. George Pataki proposed reforms a year ago and said he would slash employers' costs by more than 15% while boosting benefits by 25% for injured workers.
But Pataki's package ended in a legislative gridlock during the 2006 session. Rosasco said he expects Spitzer to fare better, if workers' advocates succeed in severing the issue from the economic fortunes of upstate New York.
"There is no evidence that says the upstate economy has been hurt by workers' compensation costs," Rosasco said. "Frankly, they have not been able to attract business after a large part of the manufacturing base left for Southeast Asia."
--By Michael Whiteley, WorkCompCentral Southeast Bureau Chief
mike@workcompcentral.com
If there is A cap put on PPD
awards will it affect A person that has ben on workers comp for
15 rears
Do people on workers comp
receive any increase in workers
comp? I have ben on PPD for 14
years still getting 300.00 week
did not get the increase in 1992.