Workers Compensation

Seen in Insurance Journal:

Mastropietro, chairman of the state’s Workers Compensation Commission, suggested that revisions passed in 1993 after what he termed a “bloodbath” between business and labor were good for businesses and have led to lower, more predictable costs for employers and the system. The changes included a one-third cut in benefits for injured workers.

Since then, labor has largely been frustrated in its efforts to rollback the 1993 cuts. But now, Mastropietro suggested, the political climate is changing and most of the bills to restore benefits that lawmakers have rejected have been gradually winning more support over the past five years.

The article cites a change in law requiring comp benefits to be offset by Social Security payments as evidence of political climate shift (although, the five-year delay between date of injury and the start of SSDI benefits in my wife’s case has me wondering how significant a change that really is….).

Also cited is a measure that came up that would have extended the number of weeks that benefits can be collected for partial permanent disabilities.

I can understand legislators’ desire to help folks injured on the job, but it also seems prudent to wonder if those same legislators’ consider the potential fallout of some of the measures they’ve apparently been considering.

I’m taking a break from data-scrubbing and catching up on my to-read pile. 

Seen in National Underwriter:

New York State Insurance Superintendent Eric Dinallo has ordered a 20.5 percent decrease in workers’ compensation insurance rates for the fiscal year beginning Saturday.

His action was prompted by reforms in workers’ comp law earlier this year, and is estimated to save New York businesses about $1 billion in the 2007-2008 fiscal year, according to the New York State Insurance Department. [...]

In March, the governor and legislative leaders announced what was called an historic agreement designed to lower the cost of workers’ comp insurance while increasing the weekly benefits for workers. The governor projected then that the result would be a rate decline of 10-to-15 percent.

New York previously permitted lifetime permanent partial-disability payments to injured workers, but the new law caps payments at 521 weeks in all but the most severe cases. It also increases penalties for workers’ comp fraud.

Under the legislation, which Gov. Spitzer made a top priority in his new administration, injured worker benefits will increase for the first time in more than a decade. Weekly benefits will increase from a minimum of $40 to $100, and the maximum will rise from $400 to $500.

Well, I suppose this is a little better than Florida’s attempt at reducing property insurance rates by legislatively wishing away.   A revision in expected future benefits is simple justification to revise rates. 

One would hope that there would be some actuarial review to derive the appropriate revision, rather than the simple election of a headline-grabbing number.

As seen at Insurance Journal:

In his first report to the state, New York Gov. Eliot Spitzer included reforms of the state’s workers compensation and health care systems among the priorities in an ambitious legislative agenda.[...]

He cited workers’ compensation as a place to start to reduce the cost of doing business in the Empire State.

“We must start with our workers’ compensation system, a system that does not work for anyone: not the employers who pay some of the highest premiums in the country, and not the workers who receive some of the lowest benefits,” he said in his address.[...]

In the area of health care, he called for a major restructuring that includes the closing and consolidation of some hospitals, a shift in spending away from institutionalized nursing homes to community and home-based alternatives, an attack on Medicaid fraud and utilizing the state’s leverage to negotiate lower drug prices.

Well, we know he can generate headlines. It’ll be interesting to see if he can effect constructive change as governor.