Workers’ Compensation Reform Included in 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.
Thank you for your continued support.
For more information or to get involved, contact Rochester Chamber Vice President of Public Policy and Advocacy Chris Wiest at Chris.Wiest@GreaterRochesterChamber.com or (585) 256-4626.
Summary of Rochester Chamber Workers’ Compensation Actions:
- August-September 2016: Designed and administered a statewide employer survey focused on the impact of high WC costs that included over 200 participants.
- October 2016: Hosted a half day workers’ compensation conference focused on best practices and reform opportunities attended by more than 100 Rochester Chamber members.
- November 2016: Presented survey results and reform priorities with upstate chamber partners to Workers’ Compensation Board leaders and members of Governor Cuomo’s staff.
- January 2017: Met with New York State Senators and other business leaders in Albany to discuss reform opportunities and potential legislation.
- March 2017: Participated in Unshackle Upstate Albany Lobby Day with senators, assembly members, and executive staff.
- January-April 2017: Hosted weekly legislative strategy and update calls with business partners.
- February-March 2017: Helped formulate and develop employer coalition with business partners. More than 65 employer organizations representing 10,000 employers added their names to letters requesting reforms.
- March 2017: Employer coalition expanded to include over 200 employer groups and individual businesses. Over 100 Rochester Chamber members add their names to letters asking the Senate, Assembly and Governor to support reforms.
- March-April 2017: Rochester Chamber Workers’ Compensation Committee leaders provide feedback to senate counsel on legislation and areas of concern.
- April 2017: Workers’ Compensation Reform legislation passed.
- May 2017: Governor Cuomo announces NYCIRB approval of 4.5% rate decrease, bringing $400 million in savings.
- May 2018: NYCIRB announces proposed 11.7% loss cost rate reduction for 2018 estimated to provide up to $1 billion in employer savings.
- April-June 2018: Rochester Chamber and its Workers’ Compensation Committee provide feedback to Workers’ Compensation Board, Senate counsel, and legislative leaders on proposals to increase the fee schedule and expand the provider network.
- July 2018: Department of Financial Services approves 11.7% loss cost rate reduction.