Making New York Better For Business And Employees
Governor David A. Paterson announced that the successful implementation of workers' compensation reforms will reduce insurance rates for the second year in a row. The cost will decline again by about five percent for 2009, following a 20.5 percent decrease for 2008, for a total reduction of about 25 percent from the 2007 pre-reform rates. At the same time, maximum weekly benefits for workers, recently increased to $550 per week, will continue to rise each year until 2010 when they will be indexed at two-thirds of the average weekly wage.
The lower rate can be credited to the successful implementation of reform legislation, which is being led by Governor Paterson. More broadly, the reform efforts are designed to reduce costs to New York businesses while increasing weekly benefits and improving medical care for injured workers. They include: increases in maximum weekly benefits from $400 to $500 in 2007, to $550 in 2008, $600 in 2009, and two-thirds of the statewide average weekly wage in 2010 when it will then be indexed annually; a streamlined system for resolving contested claims and promptly delivering benefits to inured workers, while reducing administration costs; increased fraud and compliance actions, including stiffer penalties, to make sure everyone plays by the same rules; medical treatment guidelines that will improve care at a more effective cost; a fair and even-handed set of guidelines for determining impairment and loss of wage earning capacity; and fee schedules and supplier networks for pharmaceuticals, diagnostic service and medical equipment that contain medical costs.
The related reform proposals are being developed by the Workers' Compensation Board, the Department of Labor and the New York Insurance Department, which also approves the rates for workers' compensation insurance. These rates take effect on October 1 each year.
The 2009 rate decline is due to a new rate approval system that encourages competition among insurance companies to lower rates. The actual cost of paying claims for injured workers and the cost of a state assessment declined by 8.1 percent, according to data filed by the New York State Compensation Insurance Rating Bureau (NYCIRB). Claims and assessments equal about 75 percent of overall employer cost of workers compensation insurance.