New York Workers Compensation Alliance

Need another reason to vote for Eliot Spitzer for New York Governor tomorrow? This guy just keeps on working for the little guy and fighting greedy insurance companies right up to his presumptive landslide win on Election Day. His most recent victory last week over disability claim insurer UnumProvident is just further evidence that Eliot puts injured workers first. This wasn't about getting votes (he doesn't need any more at this point) - it was about doing the right thing for disabled workers. 

Unum agreed to $15.5 million dollars in restitution to over charged policyholders and a $1.7 million dollar civil penalty. This settlement with UnumProvident, the nation's beleaguered yet largest long term disability claim insurer, comes on the heels of Spitzer's prior settlement with UnumProvident requiring them to re-access tens of thousands of previous unfair long term disability claim denials. Give Eliot Spitzer credit and your vote tomorrow - to date, he has done more to protect injured and disabled than any past NY Attorney General of recent memory.  The New York Workers' Compensation Alliance has been in his corner since our first fundraiser for him in April 2005. Now let's hope he protects New York workers' compensation claimants just like UnumProvident claimants in his new role as Governor. Good luck Mr. Governor!

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Last Sunday, the influential Albany Times Union published the WCA Letter to the Editor rebutting their editorial position on fair workers' compensation benefits in New York.  Even if they are not the greatest defenders of injured workers, they do respect free speech and we applaud their publishing our divergent views on this important matter. Click here to read our letter.

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Below is an excellent Op-Ed piece published in yesterday's New York Times on the real problem driving higher costs in New York's workers' comp system.  It should be mandatory reading for all Albany decision-makers, including the presumptive next Governor, Eliot Spitzer.

EACH year, more than 140,000 New Yorkers are injured on the job. For most, the main source for paying medical expenses and replacing lost wages is the workers’ compensation system.

As a lawyer whose career is devoted to representing these injured workers, I have spoken to thousands of people over the years about their individual cases and about the limitations of the system. I’ve spent many unhappy hours explaining that even though someone may not be able to pay rent or feed his family on his benefit amount, he is getting the most the law allows. Often, I have had to tell clients that they cannot have necessary medical testing or treatment until they get approval from their insurance company. And recently, I have had to explain to workers with problems related to 9/11 that they’ve missed the deadline for claims because of technicalities in the Workers’ Compensation Law.

Since 1992, the maximum benefit in New York has been $400 per week, although most injured workers receive less. According to the New York Committee for Occupational Safety and Health, a nonprofit coalition of unions and individual workers, this is the lowest benefit rate in the country as a percentage of the state’s average weekly wage. By contrast, New Jersey’s maximum weekly benefit is $691 and Connecticut’s is $1,005.

Gov. George Pataki, adopting proposals made by the Business Council of New York State, has suggested an increase in the maximum benefit to $500 per week, a figure that would still leave New York far behind most other states. Other elements of the proposal are a 50 percent cut in awards for permanent loss of use and a sliding scale of time limits for permanent disability benefits. This means that a worker who was permanently disabled would no longer be paid for life and “capped” at 500 weeks of benefits; those less than totally disabled would get benefits for an even shorter period.

One wonders how permanently disabled workers would survive after their benefits are exhausted. Only the most disabled are likely to receive Social Security disability benefits, and thousands of “capped out” disabled workers would be left to the mercy of public assistance or charity.

Business groups argue that workers’ compensation insurance costs too much money, and that cutting benefits for workers will result in lower insurance premiums for employers. This theory isn’t supported by the data, which shows a 45 percent drop in claims for workers’ compensation from 1991 to 2005. Other studies show that from 1988 to 1997 financial benefits paid to injured workers declined by 32 percent, a trend that has continued.

By every measure available injured workers have made far fewer claims and have received far less money over the past 15 years. Logically, workers’ compensation insurance premiums should have dropped substantially because if fewer claims are made, less money is paid out — and they have, by 30 percent during the last 10 years. During that same period, insurance carriers have made a profit of at least 9 percent per year, taking in more premiums than claims paid out.

Have insurers passed on their savings from the decline in workers’ compensation claims? It doesn’t look like it, but it’s impossible to know if they’re overcharging employers. Why? Because in New York, these insurers are required to report their data to the Compensation Insurance Rating Board and this board is governed by the insurers. With no independent verification of the insurers’ claims about their charges to employers, their payments to workers or their profits, much of their data remains suspect.

The state Insurance Department, which supervises and regulates all insurance products in New York, recently rejected an application by the rating board for a rate increase, implying its distrust of the insurers’ data. The accuracy of their claims has also been challenged by the Professional Insurance Agents of New York and by the state A.F.L.-C.I.O., which estimates that the insurers retain 35 cents out of every premium dollar. And the New York State Attorney General’s office has announced settlements with the insurance industry totaling $2.6 billion related to fraud and bid-rigging, much of it related to workers’ compensation insurance.

It’s clear that we cannot rely on an honor system when dealing with insurers that have settled fraud claims against them for billions of dollars. Therefore, the Legislature must empower the state Insurance Department to audit these insurers and publish the results, bringing a measure of truth to the question of how much premium is collected and what portion actually reaches injured workers and their families.

The problem with the workers’ compensation system is that too few of the premium dollars paid by employers reach disabled workers and their families. Too much is kept by insurers, which reap huge profits by pocketing the savings on declining claims instead of reducing charges to employers. Perhaps it should be the other way around.

Robert Grey is a lawyer.

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After a long struggle and much legislative effort by the New York Workers' Compensation Alliance and the New York State AFL-CIO, Governor Pataki signed the 9/11 Rescue and First Responders Workers' Compensation bill yesterday at the foot of the former World Trade Center site. In addition to the Governor,  Sheldon Silver, Joe Bruno, John Marchi, George Maziarz, Jonathan Bing, Susan John, and their fellow legislators deserve tremendous thanks for their compassion and support.   The signing of the new 9/11 workers' compensation law received international media attention.

Unfortunately, New York City Mayor Mike Bloomberg, in a Scrooge-like statement, blasted the new benefits. Quoting Scrooge in Dicken's immortal Christmas Carol, one might think that Mayor Bloomberg would like Ground Zero workers to "die and decrease the surplus population!". Sorry Mike - your a good Mayor, but your on the wrong side of this issue.

All in all, the Workers' Compensation Alliance had a good year.  We stopped the nasty, anti- worker changes advocated by the New York Business Council, the insurance cartel, and even rogue upstate Democrat Joseph Morrelle.  We promoted and helped pass a law that will help 9/11 heroes and their families deal with chronic illness.   We were invited and testified at a Senate Roundtable in Albany on Workers' Compensation Reform.  We helped block the nomination of a new Workers' Compensation Board Chairman with an exclusive insurance company pedigree, and instead got a new Chairwoman, Donna Ferrara, of moderate Long Island Republican pro-labor stock.  Not bad for an organization that did not officially exist until last year.  Bottom Line - the members of the New York Workers' Compensation Alliance represent well over 150,000 injured workers across New York State and we are ready to mobilize them at a moments notice to protect their right to fair compensation and medical care!. 

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Workers' Comp Alliance Co-Chairs John Sciortino and Troy Rosasco recently advocated the position of injured workers at a well attended public Roundtable in Albany sponsored by State Senator George Maziarz. Once again, Senator Maziarz proved to be an open minded fact finder seeking common ground solutions to the tough problem of Workers' Compensation.

As stated in a previous Workers' Compensation Alliance post, the panel consisted of representatives of injured workers and business. Joel Shufro, President of the New York Committee for Occupational Safety & Health (NYCOSH) made an impassioned plea to make safety on the job the number one priority. All panelists agreed this was a priority.

John Sciortino outlined the Workers' Compensation Alliance position on not capping benefits for permanent partial disabilities (PPD's) and raising the maximum benefit rate for the first time in 14 years. The business representatives continued to bang the drum that New York should cap PPD's "because 42 other states do". However, Troy Rosasco rebutted this reasoning as silly and unpersuasive. He compared such reasoning to the teenage daughter who pleas with her parents to allow her to go on an overnight ski trip "because 42 other parents do". Perhaps the other 8 states (parents) have it right! In addition, he noted that there are no university based research studies showing that workers comp costs put New York business at a competitive disadvantage. Finally, the business panel had to concede that the manufacturing economy in New York is the best it has been in over 5 years.

All in all, it was another excellent opportunity for the Workers' Compensation Alliance to speak for injured workers across New York State.

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Workers' Compensation Alliance Legislative Co-Chairs John Sciortino and Troy Rosasco will travel to Albany tomorrow to take part in the second of a series of Roundtable Discussions hosted by Senator George Maziarz, New York State Senate Labor Committee Chair, regarding Workers' Compensation Reform. Since Workers' Comp Reform was recently detached from the Governor's budget bill, it appears that workers' compensation reform will continue to be on the Albany radar screen for the rest of the year.

Also scheduled to participate in the Roundtable are: Randall Wolken, President, Central New York Manufacturing Association; Cecelia Norat, Director of State Operations for AIG; William Melchionni, Nationwide Insurance; Mark Alesse, New York State Director, National Federation of Independent Business; and Ted Potrikus, Executive Vice President, Retail Council of New York State. Members of the Senate Labor Committee are also expected to be in attendance.

Of course, the Workers' Compensation Alliance will be advocating for a long overdue benefit increase, no caps on PPD's (permanent partial disabilities), and expediting needed medical care for injured workers. Yet we will also be proposing a fair pharmacy benefit schedule that should save employers significant amounts of money by mandatory use of generic drugs. Surrounded by all these insurance and employer lobbyists, it looks like John and Troy have their work cut out for them!

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On March 16, 2006, the Rochester Democrat and Chronicle, in an editorial entitled "Fix Workers Comp", once again blamed workers' compensation for the upstate economic woes and the downfall of Delphi, the upstate manufacturer of auto parts. What a bunch of hogwash! I guess the editors didn't read (or purposely ignored) the Associated Press report of the same day indicating that manufacturers across New York State are reporting their best financial results in years. In fact, the report was so strong that it was partly responsible for pushing the S & P 500 Index over the 1,300 mark for the first time in almost five years.

The Federal Reserve Bank of New York publishes the Empire State Manufacturing Survey, a monthly survey of manufacturers across New York State that measures their financial health. This is "gold standard" information that moves stock markets, as it did on Wednesday. This information refutes the propaganda put out by the Business Council of New York State, and apparently believed by the Rochester Democrat, that workers' compensation is hurting the upstate manufacturing economy. It also undercuts the Governor's political pandering blaming workers compensation costs for the Delphi bankruptcy. For the real reasons for the Delphi debacle, click here. Hint - it's not about workers' comp!

Bottom Line - manufacturers are doing better than they have in a long time in New York State. Things are looking up! Of course they would like to "manufacture" an artificial workers' comp crisis to increase profits. That's how CEO's get paid these days. It's profits - not corporate integrity or loyalty to their employees - that govern the outrageous executive compensation packages at Delphi. Perhaps we should not be surprised by the newspaper's slanted position, unsupported by the facts. After all, newspapers are profit hungry employers too!

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On February 6, 2006 the Business Council of New York State, Inc. issued its second Comp Watch '06 bulletin. In it they try to indicate that claimants in New York State are double dipping by collecting both workers' compensation benefits and disability pensions to the detriment of municipalities across the state. The information they put out is an UNTRUTH and an attempt to reduce benefits to public employees in New York.

The Vice President of Claims for Public Employer Risk Management Association (PERMA) claims that public employees who collect workers' compensation benefits for a permanent partial disability (PPD) are supplementing those benefits with "generous disability retirement benefits." This is not true.

New York State has four Tiers within in its pension system for public employees. For those employees in Tier I or Tier II they have very generous accidental disability pension rights. However, these benefits are reduced by any amount of workers' compensation those employees receive for either a PPD or a Permanent Total Disability (PTD) on a dollar for dollar basis.

For these workers the state pension system makes a determination as how much money they are entitled to receive on a monthly basis. The system then looks to see if the injured worker is also receiving workers' compensation. If they are reeiving workers' comp, the pension is reduced for every penny of the workers' compensation benefits paid to the claimant.

Because these benefits were too costly, New York State eventually set up Tier III and Tier IV in the pension system. Most public employees today are in Tier III and Tier IV. These Tiers do not have an offset for workers' compensation benefits. However, these Tiers also pay less than the benefits available to public employees in Tier I or Tier II. Because of the overall benefit to workers, the State of New York has already reduced the amount of benefits available to workers when they become disabled on the pension side. Now the Business Council wants to take even more away from workers by trying to reduce what they are entitled to receive in workers' compensation. UNTRUTH number 2 from the Business Council.

As for Social Security offsets, the Business Council in the chart in Comp Watch '06 implies that New York State has offsets in workers' compensation for SSI benefits. This is not true. New York allows for offsets for Social Security Disability Benefits under only one provision of the law. They are allowed only when injured workers have lost the use of 50% or more of an arm, leg, hand or foot and that injury is the sole reason for the worker's inability to earn what they used earn after participating in rehabilitation. The only other Social Security offset allowed under the New York State Workers' Compensation Law is to surviving spouses in a death claim for Social Security Survivors benefits.

The Business Council thinks that if an injured worker is receiving workers' comp benefits due to a permanent partial disability and then collects Social Security and a pension in addition, the worker is double dipping from the system. Once again they are simply wrong. If a person is found to have a PPD and is collecting workers' compensation benefits, it means that they stopped working before they normally would have ended their working career. A person who stops working before they are ready to cease work activities stops contributing to both Social Security and earning credits towards a pension. This means that their Social Security benefits and pension benefits will be lower when they retire.

Once the worker stops working the employer is no longer paying the matching Social Security benefits for the worker nor are they contributing towards their pension. So the injured worker has had their Social Security and Pension benefits reduced because of their injury. Now, the Business Council wants to take away the workers' compensation which may make up what was lost by the worker in Social Security and pension benefits. This is UNTRUTH number 3 from the Business Council.

The Business Council implies in Comp Watch '06 that workers can file a workers' compensation claim to supplement their Social Security and pension benefits. What they leave out is that prior to being able to file a workers' compensation case the worker must have an accident or an occupational disease! This is the fourth and final UNTRUTH from the Business Council in Comp Watch '06.

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If employers in New York State ever needed more evidence that the real enemy to rising workers' compensation costs is insurance companies, not injured workers, they need look no further than the recent 1.6 billion dollar AIG bid rigging settlement with Attorney General Eliot Spitzer.

Bottom Line - besides rigging bids to boost their exorbitant profit margins at the expense of employers, AIG cheated the New York Workers' Compensation Board out of millions of dollars that had to then be made up higher employer premiums. All the while, AIG's now ousted CEO Maurice "Hank" Greenberg collected a tidy $29,000,000 compensation package in 2003. As of 2005, Greenberg has a net worth of 3.2 billion. If I'm a New York employer with AIG as my workers' comp carrier, I'm mad as hell. Guess what? The other workers' compensation insurance company CEO's are not too far behind.

Funny - Governor Pataki and the Business Council of New York State don't mention these facts when they complain about employer workers' compensation costs. They always blame the injured worker. Do New York employers know that the Business Council has it's own side business as a workers' compensation "third party administrator" - First Cardinal? How much does the First Cardinal CEO make? How much money does the Business Council make on this cozy little relationship? Hmm...

Hopefully, employers in New York State will wake up to the fact that workers' compensation insurance companies are making money hand over foot in New York. Every day, more workers' compensation insurance companies enter the New York market because of the lucrative profits. It's gotten so ridiculous that even State Funds from other states are coming into the New York market. Does the New York State Business Council have a response? I'd like to see it.

The only thing more ridiculous is the Governor's assertion that rising workers' comp costs had something to do with the demise of Delphi upstate. No credible business analyst would back such a silly proposition. The fact is, Delphi was cooking the books and was tanking with it's parent, General Motors. Iowans may fall for silly charades like this, but not New Yorkers, or our State Senators. Insurance company profiteering in the New York workers' compensation market is the big problem for employers in New York State. Period!

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Governor Pataki recently attached a Workers' Compensation "Reform" Bill to his 2006 Budget Bill. This bill, if enacted, would take away benefits from injured workers that they have had since 1914.

Specifically, the bill would "cap" benefits for injured workers with career ending permanent disabilities. Essentially, the Governor is shifting the cost of workers' compensation benefits from employers to county and local government. Once the injured workers' benefits run out, they will have no recourse but to apply for welfare.

If you think your property taxes are already too high, wait until the cost of workers compensation injuries is added to your tax bill!

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The Workers' Compensation Alliance, a group of individuals and organizations committed to protecting the rights of injured workers under the New York State Workers Compensation Law, has launched a new website and blog.

The Alliance first short term goal is to defeat the anti-worker provisions in Governor Pataki's recent Workers' Compensation "Reform Bill". At the same time, the Alliance is committed to increasing the current workers' compensation benefit levels which have not been changed in over 14 years.

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