Crain’s Op-ed: Fixing workers’ comp

Crain's New York Business logoThe following op-ed was posted by Crain’s New York Business. It zeros in on the high cost of New York’s workers’ compensation system. The op-ed mentions The Business Council’s advocacy efforts to improve that system – efforts that are bearing some fruit.

Crains: Corruption, campaign finance reform and fracking may be hot topics in Albany, but rank-and-file businesses across the state are more concerned about a less sensational subject: workers’ compensation. While it’s not an issue that propels political careers, New York’s system costs a whopping $6 billion a year. Surveys show only health insurance to be a greater worry for business owners.

Workers’ compensation reform happens rarely in New York because powerful vested interests—notably the plaintiff bar—are adept at maintaining what, for them, is a lucrative status quo. Aside from some key changes won by Gov. Andrew Cuomo in this year’s budget, the last significant fix was in the early days of the Spitzer administration. That 2007 change broadened the distribution of money, the vast majority of which had been going to a small fraction of workers injured on the job. But the savings that businesses were projected to realize have been overwhelmed by rising costs that were ignored or even abetted by the Spitzer reform.

With three weeks remaining in the 2013 session, there is little hope that legislators will make any more improvements this year. In fact, the business lobby is currently occupied—as it often is—with blocking bills that would make the system worse. The trial lawyers’ lobby knows its best defense is a good offense, so it pushes poisonous bills that consume the business community’s attention and resources.

Meanwhile, the Cuomo administration has shifted its efforts to improvements it can make administratively. In fact, it implemented one just last week: The Workers’ Compensation Board, after seven months of intensive advocacy by the Business Council of New York State, declared that injured employees can be assumed to have reached “maximum medical improvement” after two years. Even though the healing process for nearly all injuries rarely exceeds eight months, businesses hailed the new policy as a victory because lawyers had been dragging out cases, allowing their “still healing” clients to milk the system for six years of interim payments before starting the 10-year compensation clock established by the 2007 reform.

But many similar quirks remain unaddressed, notably the outdated schedules that dictate how long workers are paid for a given injury. Thanks to advances in medical care, ailments that once persisted for months or years are now fixed in a fraction of that time—yet the gravy train of yesteryear rolls on. That should be addressed this year by Mr. Cuomo, and next year he must press the Assembly again for reforms it denied him in March. The quest for a fair and rational workers’ compensation system continues.

[NOTE: As New York’s employers continue to struggle under the growing costs of the Workers’ Comp system, The Business Council is uniquely poised to make a significant positive impact to the system.  Not only is The Business Council the recognized representative of New York’s businesses by the Administration and the Board, through very regular communication, the Legislature has added our participation in the process into law.]

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