Governor Andrew Cuomo recently announced that workers’ compensation premiums will likely decrease by 4.5% in New York State later this year. The New York Compensation Insurance Rating Board has recommended the cut, which must be approved by the New York State Department of Financial Services, following a 9% premium increase in last year’s state budget.
According to the Bureau of Labor Statistics’ 2010 National Compensation Survey, workers’ compensation costs represented 1.6% of overall employer spending at the time. But New York State has had some of the highest workers’ comp premiums in the nation for quite some time. In fact, a study by the Oregon Department of Consumer and Business Services found the state ranked third-highest in 2016, with costs 54% higher than the national median.
A portion of the recommended cut can be attributed to New York State’s 2018 budget, which was approved last month. The insurance board credits the reforms included in that budget with around a third of the premium decrease. The remainder is connected with structural savings and the number of claims that had been filed in recent years.
Gov. Cuomo’s office estimates the reduction will save employers $400 million.
“With this rate decrease, New York is providing real savings to businesses helping to make them more competitive while strengthening protections for injured workers at companies across the state,” said Cuomo in a statement.
New York State businesses have long pushed for cost-cutting reforms. The reforms outlined in the state budget will put a limit on temporary workers’ comp benefits before awarding permanent ones.
But the budget addresses workers’ rights, too. There’ll be an exception to the temporary benefits rule for seriously injured workers, and there’s also a measure that will make it easier for emergency management officials and firefighters to claim stress-related benefits. In addition, the budget will establish a prescription drug formulary and will require the workers’ comp board to make new permanent impairment guidelines and superior medical advancements for treatment public. Further mandates such as virtual hearings, dispute resolution resources, and speedier claims processing are also included.
Sen. Fred Akshar (R-Colesville) said in a statement that he was happy with the recommendation, but that there’s “more work to do.” Still, “these initial savings will be a significant step in the right direction for both employers and injured workers,” he said.