Mention “workers”™ compensation insurance” and most people think fraud, waste, expense or just roll their eyes. The real story, however, is far more profound. For more than 100 years, workers”™ compensation insurance has been the sole safety net that an injured worker has when he or she has been unexpectedly and grievously injured while working. Workers”™ compensation insurance has a significant social impact on injured workers, employers and society as a whole.
The concept is straightforward. After an injury, a worker receives partial wage replacement and medical care while out so he or she can regain health and return to work. Employers cannot be sued since they purchased the insurance and, by improving safety at the workplace, can keep their premiums lower and manageable.
Before the workers”™ compensation law, the alternative was that employees would sue employers; employers would defend the cases and medical care and compensation for lost wages would fall on the families, charities and even the public through welfare.
However, in New York today, the positive social impact of workers”™ compensation has been replaced with a misconception about costs being out of control due to the fault of the injured workers. This misconception truly does not stand up to deeper analysis. In fact, in New York, the cost of workers”™ compensation insurance per $100 of payroll today is at its lowest point in 35 years. Nevertheless, the narrative persists that injured workers are at the root of this problem.
As a result, there are periodic reforms proposed, some that improve the system and others that further hurt already injured workers and do nothing to lower premiums for employers who follow the rules. Unfortunately, while premiums have decreased, benefits actually paid to injured workers have decreased as well.
Yet pressure continues to ”˜reform”™ the system. In April, Albany passed a sweeping workers”™ compensation reform as part of making a deal on the state budget. As with past reforms, the trend is to shift more and more of the burden onto the shoulders of injured workers and away from providing a safety net to everyday people who got hurt at work and have bills to pay and families to feed.
Workers”™ compensation only pays for actual lost time and medical care; there is no pain-and-suffering type of award as in a lawsuit. Therefore, if someone breaks an arm but misses little time from work, they would only receive compensation for the actual lost time. There would be no money for the permanent injury.
To solve this problem, the original legislation created a list of body parts and assigned specific values to those body parts. A simple formula is then used to figure out the injured worker”™s permanent injury and a monetary benefit can then be paid for that injury. The theory behind this concept is that injuring or losing limbs and digits may not keep you from work for a long time, but will be permanent and could limit your earning power into the future.
The New York State Workers”™ Compensation Board recently submitted a series of regulations and drafted impairment guidelines based on this year”™s reform legislation. These rules and regulations continue to hurt injured workers and the business climate in New York. And the scary part, especially for small ”” business owners, is that if their trusted and experienced workers suffer an unforeseen work accident, those injured workers will more than likely receive far less compensation then they deserve, may not be able to return to work and may be even reluctant to get proper medical care, thus increasing unsafe work conditions.
These new regulations significantly impair the ability of injured workers to offer evidence in support of their claims; deprive injured workers of necessary legal protections against so-called independent medical exams; and drastically reduce and in many cases, eliminate compensation for permanent injuries to limbs with no real medical justification for such arbitrary reductions. Many small-business owners are also employees themselves and are subject to the same limitations and reductions in benefits.
While improving any system is always a noble pursuit, it is important to remember the true purpose of the law: helping those who have been injured due to no fault of their own. If businesses work with their employees to better understand the system, then safer work places will be achieved and costs will continue to remain low as they already are when it comes to workers”™ compensation insurance.
Brian M. Mittman is the managing partner and owner of Markhoff & Mittman P.C., a White Plains law firm specializing in worker”™s disability cases since 1933. He can be reached at bmittman@thedisabilityguys.com.
