Changes to New York State’s workers’ compensation program are expected to save employers upwards of $1 billion moving forward. The New York State Department of Financial Services recently approved a nearly 12 percent reduction in loss cost rates – a key component of determining insurance premiums. This significant reduction is a direct result of critical workers’ compensation reform included in last year’s state budget.
For years, the Buffalo Niagara Partnership advocated strongly for reforming the workers’ comp system because of its central role in driving up labor costs in New York. Based on current rankings, New York State has the third highest workers’ comp premiums in the country. We worked closely with several employer organizations throughout the 2017-2018 state budget cycle to aggressively champion necessary change.
Last year’s state budget included major reforms:
- Ensuring classification of Maximum Medical Improvement within 2.5 years from date of injury. Currently, this classification process can take close to seven years to achieve, drawing out timelines for employees and driving up costs for employers.
- Mandating the development and release of new Medical Impairment Guidelines. The old guidelines – used to determine certain awards within the workers’ comp system – did not reflect current medical outcomes and modern treatment options.
Our collective advocacy efforts paid off. The new loss cost rates will create meaningful savings for all New York State employers – public and private. Savings will begin to take effect October 1, 2018. As a result of the reforms, employers will see a cost reduction, fair protections for workers will remain in place, and the system itself will improve.
Economic growth and workforce development are vital to the success of our region, and the burden imposed by the current workers’ comp system is an impediment to both. While the state’s economic climate is still overly regulated, these commonsense reforms are an example of the kinds of policies our state needs to continue to advance.
Our region’s success should not be hindered by harmful policies and programs. We’ve still got work to do – but the benefits of workers’ comp reform will only push us further in the right direction.