N.Y. Employers to Speak Out on Cutting WC Costs

A coalition of New York employers led by the Independent Insurance Agents & Brokers of New York Inc. will urge state lawmakers at a public hearing this week to fix the state’s badly broken workers’ compensation system by containing costs.

Lawrence T. Gilroy, chairman of the New York Compensation Action Network, will testify March 24 before the Senate Labor Committee, headed by chairman Guy J. Velella (R-Bronx). NYCAN is seeking a set of reforms that would turn New York’s workers’ compensation system from the nation’s ninth costliest to a model for the rest of the U.S.

Currently, the cost of the New York workers’ compensation system is 20 percent higher than the national average, with only Louisiana higher ($11,817) in average claim cost than New York ($11,793).
Additionally, New York ranks highest among the 50 states in percentage of claims that result in indemnity benefits and is fifth highest in the average cost for permanent partial disability awards at $84,783. Only New York and two other states (Michigan and Arizona) impose a lifetime entitlement to permanent partial disability benefits.

NYCAN warns that a legislative proposal, if enacted, to raise workers’ compensation benefit levels across the board without addressing associated costs would raise premiums on employers in the state by more than 25 percent. The consequences would be disastrous for New York’s economy, claims the coalition, and drive businesses out of the state and result in significant job losses.

Instead, NYCAN supports a cap on the duration of permanent partial disability payments, objective medical guidelines, such as those developed by the American Medical Association to determine the degree of impairment and expanding the list of scheduled permanent partial disability awards.

“We credit Sen. Velella for scheduling this hearing and look forward to working with him and other members of the Labor Committee in reaching a resolution that is fair to employees and employers alike,” said Gilroy, who is also president of Gilroy, Kernan & Gilroy, an independent insurance agency in New Hartford.

“As negotiations proceed on this issue, we hope both houses of the legislature see the need to reform the New York workers’ compensation system.”