Implementing the new workers'-compensation reform bill

CNY Business Journal (1996+), Sep 7, 2007 by Martino, Kristina

The New York State Insurance Department recently released the first of several planned recommendations for implementing the 2007 Workers' Compensation Reform Bill, passed in March.

The new law limits the number of years for which benefits are available in permanent-partial-disability cases, increases the maximum weekly benefit for injured workers from $400 to $600 over three years, and creates new programs designed to help injured workers get prompt medical treatment so they can return to work.

Aaron A. Hilger, president of Builders Exchange of Rochester, says the new bill marks the beginning of needed changes in the state's workers'-compensation system.

"The bill is a good first step but it's not going to stop all the problems," Hilger says.

Hilger is also actively involved with Builder Partners, a statewide coalition established in 2003 to seek reform of New York Labor Law 240/24 1, the state's workers'-compensation system, and other regulations affecting building and construction-related businesses. The coalition says it represents nearly 9,600 businesses employing more than 250,000 people across the state.

The Rocket Docket reform, the first of three sets of recommendations created to implement the March 2007 bill and reform the current workers'-compensation system is completed.

The first recommendations, drafted by the New York State Department of Insurance, focused on accelerating disputed cases with the New York Workers' Compensation Board.

According to a letter dated June 1, 2007, from Eric Dinallo, superintendent of the New York State Insurance Department, to the Workers' Compensation Board, the recommendations have the potential to accelerate resolutions for disputed cases at the Workers' Compensation Board.

Hilger says he had not yet read Dinallo's letter and therefore could not comment on the recommendations.

Reform proposals

When a claim is disputed it can take up to 90 days to schedule each hearing, according to the Dinallo letter.

"It takes more than 200 days to resolve a claim from the point of dispute during which the injured worker may not be receiving medical benefits and medical workers may not be paid for the worker's medical care," Dinallo writes in his letter.

Reforms highlighted by Dinallo include enhanced forms to provide increased disclosure about a specific claim, medical treatments, and prior injuries. If added, the board won't docket a claim for expedited resolution until this information is received, according to the letter.

Another recommendation requires the carrier to provide factspecific bases for defenses if a claim is disputed. Both claimant and the carrier will be required to certify their filings to promote full and accurate disclosure, according to Dinallo's suggestions.

"[A] theme that runs through many of our recommended regulations is reducing the number of cases that are disputed and decided. Early enhanced disclosure is one route to that end," Dinallo writes.

The state Workers' Compensation Board is still waiting to receive two more sets of recommendations that various state offices and business groups in the state are creating, Hilger says.

The Retum-To-Work Committee has been meeting to discuss reducing the time workers spend away from work while a Medical Guidelines Committee has also began meeting to discuss implementing medical guidelines into the bill.

Hilger says one of the biggest drivers of reducing workers'compensation costs is adding medical guidelines. Without medical guidelines added to the bill, Hilger doesn't expect to see any reduction in workers'-compensation costs.

"Without medical guidelines I don't think this [bill] will provide any cost savings to the system," says Hilger, who was CEO of McGonigle & Hilger Roofing Co., Inc. prior to joining the Builders Exchange of Rochester. He also was a former member of the New York State Assembly and a member of the British Parliament.

According to Builder Partners, roughly $19,000 is spent on every workers'-compensation case. Although the March reform is expected to lower premiums by 10 percent to 15 percent, Hilger says he expects unfavorable rates for the upstate New York area because wages are lower than in New York City.

On July 1, 2007, the weekly maximum pay for workers injured on the job increased from $400 to $500. The benefit will increase to $550 a week in 2008 and to $600 a week in 2009. Starting July 1, 2010, the weekly maximum pay will be calculated at two-thirds of the state average weekly wage, and adjust for inflation each July thereafter.

The average weekly wage of all New York State residents, boosted by the New York City area, is higher than the average weekly wage in Upstate. Thus workers'compensation payments will cost Upstate employers more on a relative basis, according to Hilger.

Builder Partners also argues that by indexing payments after 2010, the law takes away some incentive for certain groups to return to the bargaining table for more negotiations.