Employers across New York state will see the first decrease in four years in their workers”™ compensation insurance premiums after Gov. Andrew Cuomo”™s administration deemed a proposed rate increase unnecessary.
Workers”™ compensation costs, though, still challenge the ability of New York businesses to compete, according to the head of a leading state business group.
Rates for workers”™ compensation policyholders will decrease 1.2 percent, the first reduction since 2008, Cuomo announced. The governor also said the 2007 Workers”™ Compensation Reform Law, which secured benefit increases for injured workers and cost reductions for businesses, has now been fully implemented by the state.
“To create jobs and get our state”™s economy back on track it is essential that New York”™s businesses remain in a competitive position to succeed in the global marketplace,” he said. “For years, the workers”™ compensation system has been too costly for businesses and ineffective for injured workers.”
The New York Compensation Insurance Rating Board, a nongovernmental rate service organization, this year recommended a cost increase in their annual loss cost filing. According to the Business Council of New York State, the overall increase averaged 11.5 percent.
After reviewing all filings and written submissions, state officials concluded the rate increase was not necessary. The decision to reduce the rate was made by the state Department of Financial Services, according to the governor”™s office.
State Superintendent of Financial Services Benjamin M. Lawsky called it “the right decision on rates at the right time.”
Mario Cilento, president of the state AFL-CIO, said the labor movement”™s priority in the 5-year-old reform bill “was to ensure that workers who suffer injury or illness while at work receive the timely treatment they need and adequate benefit levels to support themselves. The reform led to the indexation of the benefit at two-thirds of the state”™s average weekly wage so that never again would injured workers suffer an erosion of their benefits through inflation.”
Heather Briccetti, president and CEO of the Business Council of New York State, said the reform legislation was a good-faith effort to balance benefit increases, reduced employer cost, and improved claims administration.” Now the law”™s actual impact on both benefits and costs needs to be evaluated, she said.
“The cost of workers”™ compensation coverage remains a significant competitiveness issue for New York state business,” said Briccetti, “and we look forward to working with the administration and other stakeholders on next steps in improving the system.”
