This morning, the Albany Times Union reported something that employers around the state have known for far too long, workers’ compensation costs are terribly high and continue to rise. New York consistently ranks within the top four most expensive states in the nation for comp costs. While the article quotes the administration as saying that they are open to ideas on cost-controlling reform, The Business Council has endlessly advocated to the board and the administration not only the need for reform, but the specific remedies that would cut costs while guaranteeing the best care for injured workers.
From the article: “Despite a recent drop following the 2007 reforms, costs quickly went back up and are now 20 percent higher than before the changes. And while the average workers’ compensation cost per employee was 40 percent higher than the national average before 2007, it is now projected to be even higher at 2.5 times the national average.
On average, the cost of sustaining the system, which is financed largely by assessments on employers, will run $1,000 per employee each year. What happened? While there are lots of factors, critics like Ginsburg place much of the blame on the way claimant lawyers have been able to use the reforms to their advantage. One of the big changes was an increase in payments to injured workers.
While they used to be capped at $400 per week, that was raised to $840. In exchange, workers gave up lifetime payments and instead get money for a fixed period of time which maxes out at 10 years, with some exceptions. But the timetable doesn’t start until a case is fully resolved, or the injury is “scheduled” in workers comp parlance. Payments, however go out during this negotiating period and these can easily run for years due to the various appeals mechanisms in place. Final determinations can now take six or more years.
Unfortunately, the demands of the special interests of unions and trial lawyers have ruled the day. It appears that, for now, their zealous protection of the status quo (which earns them hundreds of millions of dollars annually), will continue to balloon costs until lawmakers decide that enough is enough.