Cuomo: Workers’ Comp Reform to Bring $800M Savings to N.Y. Employers

New York Gov. Andrew Cuomo said this week that employers in the state are poised to save some $800 million annually, thanks to reforms in the state workers’ compensation system that were included in the recently passed state budget. At the same time, the approved 2013-14 budget will also boost injured workers’ minimum weekly benefit from $100 to $150.

Gov. Cuomo said the state will create one method for collecting annual assessments from employers, thereby saving self-insured employers an estimated $500 million.

This change will eliminate “an overly complicated and bureaucratic system” that was not only expensive for the state but also for employers, Cuomo said, adding that the new system will achieve administrative efficiencies and provide predictability to employers.

The savings as a result of this reform to self-insured businesses, by region, are outlined below:

Additionally, previous law allowed payments in certain old and re-opened claims to be made out of a special fund known as the Fund for Reopened Cases. Cuomo said his reforms close this fund, eliminating the need for New York businesses to make payments into a fund that is unnecessary.

The governor also said his reforms include a series of measures to increase competitiveness in the workers’ compensation marketplace that will help to drive down costs and provide relief to businesses.

Gov. Cuomo said these changes will reduce annual workers’ compensation assessments on New York businesses by $300 million. The savings, detailed by region, are outlined below:

He also said that providing a path to resolution for companies involved in the Group Self Insurance Trust crisis will provide relief for 10,000 businesses across New York State, who are currently saddled with an estimated $850 million in liabilities.

The crisis resulted from deceptive business practices among several insurance entities that offered low-cost premiums to companies, yet failed to maintain adequate funds for workers’ comp benefits, Cuomo said. When the fraud was discovered and it became clear the trusts were insolvent, thousands of New York’s businesses were socked with high and often unmanageable costs. The governor said his reforms created a bonding program that will assist the self-insured employers resolve their liabilities.

In addition, this summer the Workers’ Compensation Board will begin accepting injury reports electronically from insurers using a national standard. This will cut paper-handling costs, improve system oversight and guarantee benefits are paid timely to injured workers, Gov. Cuomo said.

As a result of these reforms, Gov. Cuomo said, New York is reforming the electronic filing process and leveraging technology to implement an aggressive agenda of structural change in the workers’ compensation system.

Source: New York Governor’s Office

Topics New York Commercial Lines Workers' Compensation Business Insurance