N.Y. Businesses ‘Stunned’ by 29% Comp Rate Hike Bid

A recommendation from the New York Compensation Insurance Rating Board (CIRB) to increase employers’ average workers’ compensation premiums by 29 percent is “stunning and frightening,” according to Business Council of New York President Daniel B. Walsh.

“It’s stunning because New York State employers already pay workers’ compensation costs that are 72 percent above average on a per-case basis,” Walsh said. “And it’s frightening because employers need rate relief, not double-digit rate increases.”

The proposal comes during a legislative session in which lawmakers have been presented with workers’ comp reforms but have not enacted any.

“California has finally acted to address its workers’ comp nightmare. New York must do the same—and must ease other costs of job creation so businesses, not taxpayers, can once again be New York’s main source of job creation,” Walsh said.

Just because the industry has requested a 29 percent hike does not mean it will happen.

Each year, the state insurance department considers the CIRB rate filing and issues a final decision on changes in premiums in assessments. The department often reduces the CIRB proposal. Last year, the department rejected two increases proposed by CIRB, 11.2 and 2.7 percent, before increasing rates by 1.7 percent. The department last year also approved a 10 percent increase in the assessment rate, raising it from 13 to 14.3 percent.

The National Council on Compensation Insurance (NCCI) in September 2003 estimated that the average cost of a workers’ comp case in New York was $11,793, 72 percent above the national average. New York’s costs are above average mainly because the state offers lifetime benefits in cases in which benefits are not “scheduled” in state statute. These cases account for 14 percent of claims, but more than 77 percent of all compensated injuries.

Governor George Pataki has filed a reform proposal that promises to cut employers’ costs by 15 percent while raising maximum benefits by 25 percent. That reform package, which The Business Council is supporting, has been introduced in the Senate (S.6841-Rules).