Workers’ Compensation Reform Included in 2017-18 State Budget
Rochester Chamber members consistently rank high workers’ compensation costs as one of their largest employer concerns. New York has the third highest workers’ compensation costs in the nation and last year the state approved a 9.3% average increase with some members reporting increases in the double-digit range. That’s why Rochester Chamber made workers’ compensation reform a key advocacy priority this budget session.
Working in partnership with Unshackle Upstate, the Business Council of New York State, and others, we are pleased to report that several cost-saving measures were included in this year’s state budget. In a system that costs New York employers approximately $10 billion annually, it is anticipated that these reforms will translate to $500 million to $700 million in cost reductions resulting in potential employer savings of five to seven percent.
Several changes of note include:
New Medical Impairment Guidelines for Scheduled Loss of Use Awards: New medical impairment guidelines from the Workers’ Compensation Board will be released by the end of this year to reflect advances in modern medicine that produce better patient outcomes. Current guidelines have not been updated since 1994. It is estimated that these reforms will lead to $100 million to $300 million in savings.
Maximum Medical Improvement Classification Capped at 2.5 Years: An impediment to realizing some of the savings promised from the permanent partial disability durational caps of 2007 has been the time taken to classify workers’ compensation cases. This reform institutes a 2.5 year limit on temporary benefits and is expected to reduce employer contributions by nearly $350 million annually.
Creation of a Prescription Drug Formulary: A new list of high quality, cost-effective medications pre-approved for injured workers will be developed and released by the end of this year.
While there is still much work to do and the need to realize additional efficiencies and savings, these changes are a step in the right direction and the first sizeable reforms in a decade.
The Greater Rochester Chamber of Commerce Workers’ Compensation Committee has been in existence for more than 20 years and played a significant role representing Rochester Chamber members and the employer community on this issue. Co-chaired by Brian Trick from Wegmans and Dr. Jim Tacci, and comprised of workers’ compensation experts from 26 member companies, the committee focuses its efforts on education and advocacy on behalf of the employer community.
More than 100 Rochester Chamber members contributed to our advocacy efforts through survey participation, conversations with Workers’ Compensation Board officials, legislators, and the media and by adding their names to coalition letters. In the end, your voice helped make a difference. We will continue to remain active on this issue and keep you updated. Click here to see a list of our latest actions on workers' compensation reform.
Thank you for your continued support.
For information, contact:
View Workers' Compensation in NYS: Did 2007 Reforms Make a Difference? (Center for Governmental Research, October 2012)
For more information on New York government, refer to these resources: