New York Workers’ Compensation Loss Costs Going Up 9.3%

New York has approved a 9.3 percent average hike in workers’ compensation loss costs effective Oct. 1.

New York businesses, while not pleased, see the hike as necessary in order to keep the insurance market stable after the state hiked benefits in 2007, according to a leading business group’s representative.

The Department of Financial Services (NYDFS) approved the recommendations by the industry’s New York Compensation Insurance Rating Board (NYCIRB).

The hike reflects a continued rise in the cost of claims, according to the industry’s filing. While claim frequency is mostly stable, indemnity costs are rising at an annual rate of about 5.3 percent and medical costs at about 5.1 percent.

Last year the state approved an average 5.9 percent increase in loss costs.

The increase reflects planned increases in the maximum weekly benefit. Under a schedule approved by lawmakers in 2007, the maximum weekly benefit of $864 as of July 1 will rise to $886 on July 1, 2017 and $922 on July 1, 2018. These increases in the maximum weekly benefit account for roughly a 0.5 percent increase in total workers’ comp claim costs, according to the industry.

The Business Council of New York State accepted the news as a cost of doing business while urging lawmakers to enact reforms to address the factors driving up costs.

According to NYCIRB, data actually supported a loss cost level increase of 9.6 percent across all classifications but it proposed the 9.3 percent increase after considering no change in the loss cost provisions for terrorism, natural disasters and catastrophic industrial accidents.

Topics Trends New York Profit Loss Workers' Compensation Talent