New York State Employers Could See Savings with Workers’ Compensation Reforms
In April, the New York State Senate passed the 2017-18 state budget with focus on reducing inhibitive regulations on businesses and growing the economy through reforms to workers’ compensation. The final budget incorporates the most significant workers’ compensation reform the state has seen in a decade.
These new reforms could create meaningful savings for employers, and Rose and Kiernan’s Employee Benefits team will thoroughly review these potential savings on a case-by-case basis for clients. The reforms’ stakeholders suggest that employees could see savings this year in rebates and added savings on premium costs after these reforms are implemented. In addition, the measures will enhance the protections in place for employees injured on the job.
What do the reforms to New York State workers’ comp entail? A press release from the New York State Senate detailing key parts of the new budget explains it best:
- “Reforming Temporary Benefit Timeframes: While 2007’s workers’ compensation reforms capped the number of years an injured employee could be eligible for permanent benefits, injured workers are currently eligible to receive temporary benefits over several years. The new budget institutes a general rule of 2.5 years for an employee to claim temporary benefits, subject to the safety valve that allows an injured worker to not lose benefits if they still need them. As a result, employer contributions are expected to be reduced by approximately $350 million each year;
- New Medical Impairment Guidelines for Scheduled Loss of Use Awards: The budget requires the state Workers’ Compensation Board (WCB) to issue new medical impairment guidelines by January 1, 2018. The guidelines would also be updated to reflect advances in modern medicine that enhance healing and result in better outcomes for patients. The new guidelines are expected to save employers hundreds of millions of dollars each year;
- Creation of a Prescription Drug Formulary: Doctors would be able to consult a new, comprehensive list of high-quality, cost-effective medications that are pre-approved to be prescribed and dispensed to injured workers. In addition, the formulary would include non-preferred drugs that can be prescribed with prior approval to ensure the worker gets the most appropriate care; and
- Rebates for Current Year’s Premiums: Since employers have already begun paying premiums based on the 2017’s workers’ compensation premium estimates, businesses will receive a rebate at the end of the year once administrators calculate final year-end savings.”
The reforms also increase protection for injured workers. Currently, only workers determined to be more than 80 percent injured qualify to apply for extended permanent benefits once the original benefits expire, but the newly passed budget increases eligibility by including workers determined to be more than 75 percent injured. Additionally the aforementioned “safety valve” for temporary benefits enables injured workers (who can demonstrate that they continue to need temporary benefits) to apply to the state WCB to continue those benefits. For workers who receive permanent benefits and cannot re-enter the job market due to their injuries, common-sense reform of permanent benefit requirements will allow them to continue to receive benefits and relieve them of staying attached to the labor market.
There are numerous components within the reforms and they will occur throughout the course of the upcoming year. It’s important to acknowledge that while virtually every employer needs workers’ compensation insurance, benefits can vary by state, including the amount and duration of medical expense benefits, disability income benefits, rehabilitation benefits and survivor benefits for a spouse and dependents, as well as a burial allowance in the event of a fatal injury. Rose & Kiernan can help to find the right carrier and solutions for your workers’ compensation needs. If you have questions about what the new legislation means for your business or coverage, please contact us at 800-242-2433.