Long Island Workers' Comp Lawyer Interviewed on NY Workers' Comp Reform

As Co-Chair of the New York Workers’ Compensation Alliance, I was interviewed for an article published Monday at the  Workers’ Comp Central web site on the upcoming workers’ compensation reform debate in Albany under the new Spitzer administration. 

Short Version – severely injured workers are going to have to fight hard to protect their rights to lifetime workers’ comp benefits when they have permanent partial disabilities and are no longer employable.  With the help of the New York State Business Council and the ever present insurance lobby, the debate  is trying to be shifted from protecting workers with horrendous injuries to re-invigorating the dormant upstate economy.  While we all support bringing more jobs back to upstate New York, there are no independent credible studies linking increased workers’ compensation costs to a decline in the upstate economy.  If workers’ comp costs were such a drain on business, why hasn’t it had a similar impact on the downstate economy? 

Workers’ comp costs declined after the 1996 reforms under Governor Pataki.  Did this jump start the upstate economy?  Workers’ compensation seems to be the easy whipping boy by some for all of upstate’s economic woes.  Sure – take it out ion the lady with no hand after it was caught in a machine at work.   Thankfully, Governor-Elect Spitzer has surrounded himself with some of the sharpest policy advisors in New York.  I have no doubt they will be able to think "outside the box" and find solutions to the upstate economic problems without hurting permanently disabled workers.

The entire article is below:

New York — Spitzer Expected to Make Sweeping Changes in NY Comp: Top [12/11/06]

An alliance of New York attorneys and other advocates representing 200,000 injured workers called for sweeping reforms in the state’s workers’ compensation system Friday and said it has high hopes for Gov.-elect Eliot Spitzer.

"We think he’s going to take a hard look at insurance companies before he proposes any major change in workers’ compensation," said , who co-chairs the New York State Workers’ Compensation Alliance.

"There are already meetings going on, and the time will be sooner rather than later," Rosasco said. "I would think we would have substantial workers’ comp reform of some sort or another within the first six months of the Spitzer administration."

Spitzer’s transition team did not respond to a request for an interview Friday. And the veteran state attorney general is keeping his own plans for workers’ compensation reform close to his vest.

He has told participants in a series of meetings intended to forge a compromise among employers, claimants’ attorneys and the unions that they won’t get a preview of his plans until his inauguration next month.

But Spitzer gained national attention with a string of major settlements with insurers over allegations of accounting irregularities and the payment of illegal contingent fees to secure business.

Most notably, Spitzer signed a record-setting $1.65 billion settlement with American International Group in February, after he accused the insurance giant of cooking its books to smooth out quarterly financial earnings reports.

That surpassed his $850 million agreement with Marsh & McLennan over its use of continent commissions paid to brokers.

And the AIG case led to the ouster of former company CEO Maurice "Hank" Greenberg and his chief financial officer, Howard Smith, as well as a string of ongoing civil and criminal cases.

"He’s a good sheriff of the industry," Rosasco said.

With the New York State Assembly set to return to Albany in January, Spitzer has promised to call a summit meeting of shareholders in workers’ compensation.

Reforming the system was a major part of his campaign, along with rescuing the beleaguered economy of upstate New York.

The state of the economy has pitted the alliance against the Business Council of New York State and its affiliate, New York Workers’ Compensation Action Network (NYCAN).

NYCAN has called on Spitzer to impose the state’s first cap on permanent partial disability, saying the PPDs account for 15% of the state’s workers’ compensation cases and 75% of the expenditures.

The alliance is opposing the caps and pushing hard to raise the maximum weekly benefit for injured workers, which has been capped at $400 since 1992.

On Friday, the alliance called for increasing the maximum benefit to two-thirds of the state average weekly wage. Suggesting a phased-in payment schedule, the alliance also is seeking to raise the minimum weekly rate from $40 to $120.

The alliance wants to raise the benefit amount under the state’s Disability Benefits Law to one-half the claimant’s average weekly wage without a maximum limit. And it wants Spitzer and lawmakers to require the state Workers’ Compensation Board to set a future revaluation date for workers with PPDs, at which time the worker would have to demonstrate an attempt to reenter the labor market.

The proposals released Friday would increase the dollar limit for required pre-approval of medical services from $500 to $1,200 and require private carriers to pay for medical care while workers’ compensation claims are pending.

Finally, the proposals would abolish the Compensation Insurance Rating Board and transfer the job of ratemaking classification to state government.

"The biggest issue and the biggest stumbling block we will face in the upcoming negotiations is how injured workers with permanent partial disabilities are treated," Rosasco said. "If he (Spitzer) were to implement a cap, those who remain out of work will become wards of the state welfare system."

Citing upstate New York’s depressed economy, NYCAN said in is recently call for action from Spitzer that brokering a compromise on workers’ compensation is "the best way to send a signal that he will boost upstate’s fortunes."

NYCAN warned that New York has the second-highest average workers’ compensation claims in the nation despite the fact that its maximum weekly benefit hasn’t changed in more than a decade.

The group said employers’ costs are 15% above the national average. Average claims are more than $16,000, up from $11,793 two years ago.

The group called for limiting PPD awards to 10 years.

Current Gov. George Pataki proposed reforms a year ago and said he would slash employers’ costs by more than 15% while boosting benefits by 25% for injured workers.

But Pataki’s package ended in a legislative gridlock during the 2006 session. Rosasco said he expects Spitzer to fare better, if workers’ advocates succeed in severing the issue from the economic fortunes of upstate New York.

"There is no evidence that says the upstate economy has been hurt by workers’ compensation costs," Rosasco said. "Frankly, they have not been able to attract business after a large part of the manufacturing base left for Southeast Asia."

–By Michael Whiteley, WorkCompCentral Southeast Bureau Chief
mike@workcompcentral.com