Stakeholders Need Accurate Statistics Before Reforming Workers' Compensation in New York
Here's an interesting article hot off the press from Workers' Comp Central regarding why workers' compensation reform in New York may take longer than expected:
New York Reform Plan Could Be Months Away: Top (1/8/07)
A key aide to newly inaugurated Gov. Eliot Spitzer has begun talks with state union and business leaders about revamping New York's embattled workers' compensation system.
But claimants' attorneys representing two major workers' compensation lobbies said Friday that hope of a swift compromise under the governor's watch is fading because the state lacks solid data on losses and premiums.
"The AFL-CIO and the Business Council of New York State have been meeting with the governor's advisers for the past few weeks," said Troy Rosasco, co-chairman of the New York State Workers' Compensation Alliance. "Unfortunately, I think all of the parties are finding that workers' compensation is much more complicated than anyone envisioned.
"Even though all the parties would like to move as quickly as possible," he said, "it simply may not get done in the near term."
Rosasco and Robert Grey, an attorney and board member of the New York Council for Occupational Safety and Health (NYCOSH), said a lack of specific data on losses and the profits of carriers is at the heart of the dilemma.
The alliance consists of attorneys and others representing injured workers. NYCOSH represents 200 labor unions and 400 individual workers, physicians, lawyers and others.
New York is not one of the 37 states for which premium and loss data is collected and rates are recommended by the National Council on Compensation Insurance (NCCI) Instead, rates are recommended by the New York Compensation Insurance Rating Board (NYCIRB).
The New York Insurance Department twice rejected workers' compensation rate requests from NYCIRB, first for about 25% and later for 12%, Grey said.
"The state Insurance Department said you'll have to have zero and like it," Grey said.
NYCIRB could not be reached for comment Friday.
Spitzer's chief policy adviser, Paul Francis, was appointed to talk with warring parties in the workers' compensation debate and come up with a compromise for lawmakers.
Rosasco said the alliance had hoped to see a reform bill by the end of January but now thinks it may be months away. Alliance representatives are scheduled to talk to Spitzer's staff in the next two weeks.
"Insurers' current profits were 7.8% in the workers' compensation sector. They far outweigh the profits in other lines of insurance. Property and casualty is down to 3 or 4%," Rosasco said.
Rosasco said the state's self-insurers, which comprise 35% of the market, don't have to supply data to the state. That includes the employees of New York City, where the system is grappling with 2006 legislation passed to compensate rescuers and their survivors following the Sept. 11, 2001 attacks on the World Trade Center.
The alliance has called for raising the maximum weekly benefit for insured workers from $400, where it has been capped since 1992, and indexing it to two-thirds of the state average weekly wage.
The alliance and NYCOSH also are opposing a call by insurers and the Business Council to place the first cap on New York's permanent partial disability. PPD benefits are now paid over the lifetime of workers in New York. Businesses and insurers have suggested ending them after 10 years.
The Business Council and the affiliated New York Compensation Action Network (NYCAN) argue that permanent disability benefits account for 15% of the state's workers' compensation cases and 75% of the expenditures.
At the heart of the debate are two statistics.
NYCAN said employers' costs for workers' compensation insurance are 15% above the national average, but the state pays among the lowest maximum weekly indemnity benefits.
Both sides of the debate were celebrating Spitzer's state-of-the-state speech last week. Injured worker advocates were happy that Spitzer didn't call for capping PPD.
But Business Council spokesman Michael Maguire said his group also saw Spitzer's speech as a promise for reform. Maguire said he could not comment on negotiations with Spitzer's advisers.
"We're still optimistic, because the governor in a major speech this week has reaffirmed his commitment to workers' compensation reform," Maguire said "He has been unwavering since he first announced his campaign for election. We take that to be a very good sign."
A press aide to Spitzer promised to provide a future interview with a transition team member on Friday. The AFL-CIO did not return a phone call.
Grey said until the groups can obtain valid statistics from an independent party, he's not convinced the system needs changes that would reduce benefits."
"This is a fictitious storm," Grey said. "There is no workers' compensation crisis in New York."
--By Michael Whiteley, WorkCompCentral Southeast Bureau Chief
mike@workcompcentral.com
