New York Workers’ Comp Rates to Drop 5 Percent

August 27, 2008

Premiums for workers’ compensation insurance in New York will drop 5 percent in 2009, said Gov. David Paterson, marking the second straight annual decline since landmark reform legislation was passed in 2007.

The drop in rates follows a 20.5 percent decrease in 2008, a total reduction of about 25 percent from pre-reform rates. Maximum weekly benefits for workers have also risen, increasing to $550 per week. Those benefits are set to continue rising until 2010, when they will be indexed at two-thirds of the average weekly wage.

“Last year’s historic agreement set the framework for workers’ compensation reform, but the savings are actually produced through the difficult work of developing and implementing the proposals,” Paterson said. “We have made progress. Two years ago, New York had one of the most expensive workers compensation programs in the country. Now, we have one of the least expensive. We still need to do more and I am committed to ensuring that this reform program makes New York a better place to do business and a safe and secure place to work.”

The reforms enacted by the state include a streamlined system for resolving claims, and increased fraud investigation and compliance actions. The related reform proposals are being developed by the Workers’ Compensation Board, the Department of Labor and the New York Insurance Department, which also approves the rates for workers’ compensation insurance.

New rates take effect on October 1.

The actual cost of paying claims for injured workers and the cost of a state assessment declined by 8.1 percent, according to data filed by the New York State Compensation Insurance Ratings Bureau (NYCIRB). Claims and assessments equal about 75 percent of the overall employer cost of workers’ compensation insurance.
“We are determined to be creative in finding ways to reduce costs for business, while protecting workers,” Insurance Superintendent Eric R. Dinallo said. “Encouraging insurance companies to compete by being more efficient is just one of the reforms we are implementing. We continue to work jointly with business, labor, insurers and the Legislature on making these reforms real and effective.”

Added Kenneth Adams, president and chief executive officer of The Business Council of New York State: “Lowering the cost of workers’ compensation insurance is important to making our economy more competitive, especially in Upstate New York… We look forward to working with Governor Paterson, his agencies and the legislature in completing implementation of the 2007 reform package, to assure long term affordability of the State’s workers’ compensation system.”

Source: New York Governor’s Office

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