|Construction workers eat their lunches atop a steel beam 800 feet above ground, at the building site of the RCA Building in Rockefeller Center.|
A new report shows that workers’ compensation costs are continuing to increase despite 2007 reforms, keeping New York’s tax as the highest in the nation, Haley Viccaro reports for Gannett’s Albany Bureau.
New York’s 18.8 percent workers’ comp surcharge is approximately five times the national average, according to Monday’s report by the Workers’ Compensation Policy Institute, a non-partisan policy research group.
These assessments are a tax on workers’ comp premiums, which are used by state governments to fund the system. The 2007 Workers’ Compensation Reform Act attempted to decrease this tax, and New York lowered the assessment by 6.9 percent. However, nationwide assessments were down by 9.5 percent, and the share employers have to pay was lowered only slightly.
“This tax continues to burden all employers – and municipal employers feel this mandate intensely as they continue to struggle to provide essential services and contain taxes,” said Paul Jahn, the group’s executive director, in a statement. “This pressure was recently intensified by the 2 percent property-tax cap,” he said.
This year, New York’s 18.8 percent assessment is the second highest since reform. Employers are covering more in assessments now than four years ago, paying almost 50 percent of their compensation dollars.
The Second Injury Fund, created to help disabled veterans find jobs, accounts for half of these high assessment charges. Additional factors include tax to fund the Reopened Claims Fund and cost for the state to administer the Workers’ Compensation Board.
Experts are concerned that the New York system is underfunded with workers’ comp benefits increasing regularly. Although there was a small relief this year, New York continues to have the highest administrative costs in the country.
To view the full report, click here.
This post, via Politics on the Hudson, confirms what those of us who toil daily in the New York insurance markets already knew: The 2007 Workers' Compensation reforms, which were supposed to fix the system, have fallen woefully short of the mark. Approved loss costs rose by an average of 7.7 percent in 2010 and 9.1 percent in 2011. The Department of Financial Services denied a request for an additional 11.5 percent increase this year, a move that may limit the market for New York employers.
In the mean time, some reforms are still not fully implemented five years after reform, and as this article indicates, premium assessments, which are not subject to regulatory approval, are among the highest in the nation. The state is still reeling from the implosion of the group self-insured trust system, which has left close to $1 billion in unfunded claims in its wake. It all adds up to a system badly in need of repairs.
New York workers who get hurt on the job have forfeited the right to sue their employers; in return, they deserve swift, predictable and reasonable compensation for their medical bills and lost wages. New York employers have given up the right to not pay for employee injuries they didn't cause; they deserve predictable costs and an environment that gives them the opportunity to compete. Insurers in New York are writing the checks for these injuries and deserve premium rates that reward them for taking on the risk. None of these players in the system are happy with what we've got.
In less than two months, the election season will, much to the relief of the electorate, be over and it will be time for lawmakers to give their attention to governing. The New York State Legislature and Gov. Andrew Cuomo would do well to put Workers' Compensation high on their priority lists.