In role reversal, biz group seeks increases to workers' comp premiums while labor lawyers oppose

Jul 5, 2016 -- Posted by : admin

Workers’ comp costs for employers statewide could jump if the business lobby gets its way. Wait, what?

In a counterintuitive turn, the leading trade group for New York businesses wants the premiums employers pay to be allowed to go up by 9.3%—and lawyers for workers want them to stay down.

The disagreement over insurance premium hikes is part of a war over the state's workers' compensation policies, with employers fighting costs and labor backing benefits. The state Department of Financial Services limits how much workers' comp premiums can rise, and must decide the top rate by July 15.

Of course, the Business Council of New York State ultimately wants these costs cut. But it says arbitrarily keeping rates down obscures the issue. It sees reducing costs as the real solution and wants them reduced via rollbacks and reforms it had sought in Albany this spring and now wants the governor to implement administratively.

For example, the council pursued cuts to the amount that certain injured workers collect under “schedule loss” rules. Those workers can receive six-figure windfalls for undergoing routine procedures and collect them even after returning to their jobs, the trade group says. Reducing premiums would not address those root causes of workers' comp costs, according to the council—which mostly advocates for the kinds of businesses that pay premiums but also represents some insurers. In the long run, it worries that low premiums will shrink the comp-insurance marketplace. Less competition would mean higher prices.

The 9.3% increase is "obviously not the outcome that the Business Council had hoped for," said Lev Ginsburg, its director of government affairs, "but these numbers unfortunately reflect the true costs of New York’s deeply troubled workers’ compensation system."

"The real issue facing New York’s employers [is] the failure of policymakers to address the underlying causes of rate increases," he added, citing increases in maximum benefits, litigation and medical costs, "all of which is fueled by trial lawyers and their push to maintain their lucrative status quo.”

But the workers’ side sees the Business Council’s stance as a political ploy to increase costs in order to justify gutting benefits. They refute the council’s claim that insurers are underwater. And they fundamentally disagree that the comp system is in dire need of overhaul.

Read the full article here.

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