Workers’ Compensation Rates To Drop By Record 20.5%
New York State Senator Thomas P. Morahan announced that rates for workers’ compensation insurance will decline bymore than 20.5% and save New York businesses about $1 billion in the 2007-2008 fiscal year. The rate drop stems from the historic reform of the Workers’ Compensation Law earlier this year. Based on a careful analysis of the impact of the reforms and market trends, New York State Insurance Superintendent Eric Dinallo has ordered a 20.5% decline in workers’ compensation insurance rates for the fiscal year beginning July 15. In March, the Governor and legislative leaders announced an historic agreement designed to lower the cost of workers’ compensation insurance while increasing the weekly benefits for workers.
"This is a victory for workers who will receive increased benefits, and for businesses that will see a significant reduction in premiums, " said Senator Morahan, a member of the Senate Labor Committee.
Superintendent of Insurance Eric Dinallo said: "Workers’ compensation reform is working. The Insurance Department was assigned to implement the reforms, and we are succeeding. Last month, we produced an accelerated system for resolving disputed cases by the June 1st deadline. Today, we are announcing substantially lower rates. In the months ahead, we will continue working with the business community, labor and the insurance companies to make New York’s workers compensation system the best in the nation,
improving equity while lowering employer costs. We believe that the rate reduction is fair, that the private carriers will remain profitable, and that the market will continue to be competitive."
The lower rate is possible largely because of the passage of the 2007 Workers’ Compensation Reform Act, which included a number of reforms designed to substantially decrease costs, increase workers’ weekly benefits and improve system performance. The reform package:
●Increases maximum weekly benefits by 75% for injured workers, but
still lowers employer costs significantly by creating fair limits on
the benefit duration.
●Eliminates the Second Injury Fund, which creates stronger incentives
for carriers and employers to control risk, reduce claim frequency
and settle cases at reduced cost.
●Speeds resolution of disputes and lowers the costs of administering
the workers’ compensation system.
●Requires evidence-based treatment guidelines that provide more
effective medical care at lower cost. Workers will recover more
quickly and more completely so they can return to work earlier and be
more productive when they are back on the job.
●Produces pharmaceutical and durable medical equipment (DME) fee
schedules and networks that reduce high drug and equipment charges.
●Enacts a diagnostic fee schedule and networks that will reduce the
cost of MRIs, CAT scans and other tests.
●Adds tough anti-fraud provisions designed to reduce bogus claims and