Remember that bill we talked about last week or the week before, put out in New York in order to reform the workers’ comp system there? It had the support of the state governor, Gov. Eliot Spitzer, as well as business leaders, labor leaders, and top state politicians. That could explain why the workers’ comp reform is now passed and close to becoming law in the state. All that needs to happen now is for Gov. Spitzer to sign the bill, and since it was largely his idea, you can expect that to be a go.
The New York state legislature passed the new law this past Tuesday. The plan promises to reduce the costs of workers’ comp for employers in the state of New York on average as much as 10 percent to 15 percent. The reforms would also limit the amount of time that people on workers’ comp and disability can receive those payments. On the other hand, the new reforms also increased the amount per week that employees on disability or workers’ comp can get for their benefits.
Workers’ comp reform, as I probably have explained before to you in the past, is a state by state thing. As the system is set up, each state has its own version of how workers’ comp works. The system in New York was notorious among employers and employees as not being too good—hence the need for these reforms, cost cuts, and a dose of fairness for everyone involved.
Chances are, the new New York workers’ comp law might require employers in the state on one hand to get a new workers’ comp labor law poster for the state. That is something I will have to stay tuned to see if that is what takes place. In the meantime, New York employers, I would be prepared to need an update to your poster collection.
All of those fraud protection measures I was talking about that are going to be in the new New York workers’ comp system could, according to my inside sources, save the state as much as $114 million a year. Again, these numbers are a big deal, because the New York labor market, one of the biggest in the country, is a big deal.
You want to hear what else is a big deal in this new workers’ comp system in New York? Safety. That is right, one of my favorite topics here at this blog will be a focal point of the reforms for the New York workers’ comp system. That’s because employers who make safety training a priority in their work sites and adopt programs to teach their workers about safety on the job would qualify for discounts on their premiums for their workers’ comp insurance. That means direct savings on the price tag for their coverage, on top of the long term savings they will see when their workers have fewer accidents. A double win!
Plus, as I was mentioning earlier, the new system could save employers money by limiting the amount of time that employees can get their disability payments. For instance, for a permanent partially disabled worker, the new limit will become 225 weeks to 525 weeks, depending on how bad their injuries are. That would average out to be about 344 weeks of disability payments, according to the Business Council. Their medical benefits, on the other hand, would be life long.
One of the benefits to these limits, supposedly, is that it will get workers to return to work faster, or at all, as well as to retrain and learn a completely new occupation if necessary if they know that their weekly payments are about to end.
The value of the new workers’ comp system can not be understated for employers in the state, and that explains why I am not going to stop talking about it just yet. In the workers’ comp world, this is big news. And since the average employer out there deals with workers’ comp issues, perhaps on a daily basis, I know you guys, my loyal readers, can appreciate what a little workers’ comp reform means.
Just grasp this—according the governor’s office, the new workers’ comp reforms in the state could save the overall economy about $500 million per year. That is a big number. For employers alone, the estimates are that the new workers’ comp system could save you guys as much as 10 percent to 15 percent off your workers’ comp insurance premiums.
This could be one of the biggest reforms in the New York workers’ comp system since it was created way back in 1914. New York, as with many of the state systems that we have looked at in the last few months, is what is called a no-fault insurance system, so that employers get benefits if they are hurt, while employers cannot be blamed for any injury that employees get benefits for. Yet in New York, court cases and disagreements have happened because workers’ comp insurance companies then challenge the worker.
To tackle some of these issues, and to stop fraud in the system, the new reforms would automatically ban any employer who gets caught cheating the system from getting any state or city work contracts for five years. One example of this could be an employer who lies about how many employees they have, in order to pay a lesser insurance premium. State officials could also shut down any construction project where the workers aren’t covered by workers’ comp.
It’s taken years, but New York could finally have a way to revamp its workers’ comp system, which from what I’ve heard has long been a mess and an important issue for employers in the state. The gist of the new reforms will be an increase to the weekly benefits that injured employees will get through the system, as well as stiffer penalties and better regulation on employers who try to defraud the system.
Gov. Eliot Spitzer helped to forge the agreement between the lawmakers in the state, and business and worker leaders. The reason for the change is the huge cost that the workers’ comp system has been to employers in the state, as well as a weekly compensation maximum amount that has not increased for nearly 15 years. The maximum benefit now is $400. It will become $650 by the year 2010.
Some other problems of the existing but soon to be past system is that it takes a lot of time for workers to get payments after they get injured, because workers’ comp claims could get lost in months or years of legal wrangling. Other issues surround doctors in the workers’ comp system who seemed to provide the right diagnosis for whomever they were working for. Again, this is from I have heard about the New York workers’ comp system. I am not an New Yorker, have never hired or worked in the state, nor am I a workers’ comp related doctor in the state. So I am not taking sides—just telling it like I heard it.
Some of the changes to the workers’ comp system to occur thanks to this new bill could include that the time frame in which workers can get benefits might be shortened. The state might also create a fee schedule, or payment rate, for the drugs, tests, and medical devices that injured workers get from medical providers.
In New York, employers are all required, for the most part, to have workers’ comp coverage for their employees. That much we know from our previous foray on this blog into the workers’ comp system in New York. But do we know what it takes for workers’ comp related accidents to turn into a disability that could then warrant payment of actual compensation dollars?
It takes timely and accurate reporting of all accidents and injuries by your employees. They must report these incidents either to you directly as their employer, or to their direct supervisor if that’s who is next in line in the chain of command in your organization. Then it’s up to you the employer to turn that incident report into an accurate and timely submitted first notice of injury form.
All of this process is of course more detailed than I am letting on, and it isn’t a guarantee that every first incident of injury report will lead to compensation payments for the employee. If it turns out that an injury or illness isn’t really linked to the workplace, then the payments probably won’t find their way to the employee. Or if one of the procedures in the New York workers’ comp injury reporting system isn’t followed correctly, either by you or by your employee, then the payments may not come either, or they may not come as quickly as they could have.
You might leapfrog this problem entirely by keeping yourself, your supervisors, your human resource staff, and all of your employees up to date and knowledgeable in general about what it takes to make the workers’ comp system running smoothly. One of those ways to keep every up to date also just happens to be part of the workers’ comp regulations, and that is a workers’ comp poster for each and every one of your work sites.