The political conditions that have fostered a stable workers’ compensation market in Connecticut for the past 15 years are showing signs of erosion, the chief administrator for the state’s workers’ compensation system has warned.
“Workers’ compensation is cyclical… and we are now in the middle of where cyclical changes tend to occur,” John A. Mastropietro told a gathering of independent agents last week.
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.
One bill—to repeal the offset in workers’ compensation for Social Security payments— was passed last year.
Legislators also considered extending the maximum number of weeks of additional benefits for partial permanent disabilities that a workers’ compensation commissioner might award after the worker has exhausted regular benefits. The Senate approved the bill 21-15 but it died before the House voted on it, much to the relief of the Connecticut Business and Industry Association and a coalition of more than 100 business groups that opposed it.
The Senate also passed another bill opposed by businesses that mandated that all employers with more than 50 workers provide paid sick days.
“What was DOA (dead on arrival) in 1994 through 1996 is no longer DOA in 2008,” Mastropietro told the Independent Insurance Agents of Conn. at a meeting in Southington.
According to Mastropietro, of the 351 legislators who were around in 1993 for that battle, only 23 are still in office. “This is an entirely new generation with different viewpoints,” he suggested, maintaining that he takes no side in the fight.
Recent indications from insurers suggest that the rate stability for the $732 million system may be eroding as well.
The National Council on Compensation Insurance, which represents insurers writing the coverage, has filed for an average 3.4% hike in voluntary market rates for next year, along with a 1.2% increase for the involuntary market.
Mastropietro maintained costs are up because medical costs and the state’s average weekly wage are up.
“The winds are blowing,” Mastropietro told agents.
According to NCCI, Connecticut ranks 38th out of 51 jurisdictions in workers’ compensation premiums per $100 payroll. It ranks 44th out of 50 for cost per case for indemnity payments.
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