Daniel B. Walsh, president of the Business Council of New York State Inc. (BCNYS) called the move "stunning" and "frightening."
"It's stunning because New York State employers already pay workers' compensation costs that are 72 percent above average on a per-case basis," Walsh said. "And it's frightening because employers need rate relief, not double-digit rate increases."
CIRB is an insurance-industry entity that each year recommends a change in workers' comp premiums and assessments. Premiums are the basic rates employers must pay to provide insurance coverage for their workers. Assessments are taxes on premiums which support the operations of the Workers' Compensation Board and special funds that are part of the workers' comp system.
Although the NYCIRB filed the proposed the rate increase with the New York State Insurance Department, it does not mean it will be approved. In 2003, the NYCIRB asked for rate increases of 11.2 and 2.7 percent, but the state insurance department increased rates by 1.7 percent. The department also approved a 10 percent increase in the assessment rate, raising it from 13 to 14.3 percent last year.
The proposal from the NYCIRB comes during a legislative session in which lawmakers have not enacted workers' comp reform and employers, said Walsh, are feeling the pinch.
"California has finally acted to address its workers' comp nightmare. New York must do the same, and must ease other costs of job creation so businesses, not taxpayers, can once again be New York's main source of job creation," he added.
The Business Council made workers' compensation reforms a top legislative priority this year, and the group claims there is evidence that momentum for reform is growing:
Earlier this month, the council's board of directors passed a resolution urging lawmakers to enact meaningful workers' comp reforms to reduce employers' costs.
More than 1,600 individuals have generated nearly 8,000 faxed letters to Gov. George Pataki and legislators in Albany urging workers' compensation reform, though a Web-based electronic-advocacy campaign being conducted this spring by the council in collaboration with affiliated chambers and other business groups.
The National Council on Compensation Insurance (NCCI) in September 2003 estimated that the average cost of a workers' compensation case in New York was $11,793, 72 percent above the national average. New York's costs are above average mainly because the state offers lifetime benefits in cases in which benefits are not "scheduled" in state statute. These cases account for 14 percent of claims, but more than 77 percent of all compensated injuries.
At the Business Council's Small Business Day, Pataki announced a reform proposal that would cut employers' costs by 15 percent while raising maximum benefits by 25 percent. That reform package was introduced in the state senate as S.6841-Rules. The bill would:
- Limit the duration of benefits in cases for which the level of benefits is not defined by statute.
- Reduce surcharges now imposed on employers' premiums, called assessments, by adjusting the calculation used to determine assessments. Currently, assessments are based on 150 percent of the previous year's disbursements from a special fund. The proposed change would lower that rate to 125 percent.
Another workers' compensation reform bill (S.5320-Libous, A.8862-Schimminger) would:
- Limit, to 10 years, the duration of benefits for injured or sick workers in cases in which benefits are not prescribed by statutory schedules. The goal is to give both ample benefits and sufficient time for retraining before returning to work.
- Provide for Social Security and pension offsets that is, reductions in workers' compensation benefits applied when workers receive Social Security or pension benefits.
- Give injured workers only half of remaining scheduled benefits if they return to work before scheduled benefits expire.
- Implement medical guidelines to determine the degree of disability and the ability of workers receiving benefits.
