Senator Robach Announces Important Agreement To Reform Workers Compensation System
In addition to an increase in benefits, employer costs, which are among the highest in the nation, will be reduced by 10 to 15 percent with savings to grow over time.
This comprehensive reform package included the following changes:
*The maximum weekly benefit for injured workers will be increased from $400 to $500 in the first year, $550 in the second year, $600 in the third year, and to two-thirds of the average weekly wage in New York in the fourth year. Once the maximum benefit reaches two-thirds of the average weekly wage, the maximum benefit will be indexed annually;
*The minimum weekly benefit will be increased from $40 to $100;
*Cost savings worth hundreds of millions of dollars will be achieved by setting maximum number of years that a small population of claimants can receive cash benefits. Medical services will continue, however, and a safety net will be established to help these workers return to gainful employment and to intervene in cases of extreme hardship;
*Innovative programs are being established to get workers prompt medical treatment and to help them return to work;
*Strong anti-fraud measures will be in place, including the ability to stop work on a job site where a company has failed to purchase workers’ compensation insurance for its workers, higher criminal penalties for violators and debarment provisions;
*An expensive fund known as the Second Injury Fund that is now financed by assessments passed through to employers will be closed. The fund was initially set up to help injured Word War II veterans, but is now instead used by some insurance carriers as a costly loophole to avoid paying claims; and
February 1, 2008. The Superintendent of Insurance will make a recommendation to the State Legislature in September 2007 as to what, if anything, should replace it.
“This is a victory for business and for labor,” Robach added. “And it is the result of people working together to deliver a result that will benefit all New Yorkers because it will remove a major obstacle to business growth and job creation, especially in Upstate New York.”
In addition, after close consultation with the legislature, the Governor has directed the Superintendent of Insurance along with appointees of the legislature, business and labor to work with the Workers Compensation Board, the Department of Labor and legislative Task Forces to pursue a number of additional reforms administratively and to make recommendations about additional legislation. These important initiatives include:
-Gathering data on system costs. For years, the legislature and the public has had to struggle to understand the costs and the outcomes of the workers compensation system. There will now be transparency;
-Designing an expedited hearing process to reduce litigation and speed the time it takes for workers to receive treatment and return to work; and
-Designing by year-end new fact-based medical guidelines to replace New York’s current outdated system. In addition, in conjunction with the Workers’ Compensation Board, the Superintendent will design treatment guidelines and training for law judges.
The accord was hailed by business and labor advocates.