WCA Releases White Paper on Workers' Compensation Costs
Business and insurance interests have repeatedly claimed that workers’ compensation is a “high cost” to employers, that it saps New York’s economic competitiveness, and that the system must be “reformed” to reduce costs.
None of these claims are true. To the contrary, workers’ compensation costs in New York have declined dramatically in the past twenty years, and workers’ compensation is a small and declining portion of employer costs. Trends in the law, accelerated by statutory changes in 2007 and a host of administrative and regulatory initiatives, have reduced worker access to benefits and have reduced claim costs across the board. Overall, the cost of workers’ compensation in New York is slightly lower than other costs in the state, and is comparable to similarly situated states.
Invariably, the target of these cost reduction efforts is benefits for injured workers, whose claims are portrayed as driving increased costs. However, the driving factor in the debate about workers’ compensation is not claim costs, but insurer profits. The simple fact is that insurers benefit from greater system costs. As more money flows through the system, insurer profits increase. To deflect attention from this fact, insurers blame the claims of injured workers when attempting to increase their charges to employers.
The WCA has taken an in depth look at the issues and prepared a White Paper to set the record straight. A copy of the White Paper is available here.