Workers’ Compensation Roundtable

April 10, 2006

Albany, New York

This was the second in a series of Roundtables on WC planned by Senate Labor Committee Chairman George Maziarz.

Speakers included:

Tony Rosasco and John Sciortino, New York Workers’ Compensation Alliance;

Ted Potrikus, director of government relations, Retail Council of New York State;

Mark Alesse, New York state director, National Federation of Independent Business;

David Dudley, lobbyist, New York State Trial Lawyers Association;

Randall Wolken, president, Central New York Manufacturing Association; and

Joel Sufro, president, New York State Committee for Occupational Safety and Health.

The format was similar to the first roundtable, with each participant invited to make an opening statement followed by an exchange of views amidst questioning by Senator Maziarz.

Trial Lawyers. Dudley said his organization is concerned about the low benefit level and questioned what is driving the increase in premiums, if not benefits? He pointed out that the rate of claims has decreased. He suspects “hidden, unexplained factors” that are making workers’ comp costs a burden to business. He said his group wants to partner with business to improve the business climate.

Dudley cited the 2004 WC Board report showing special assessments of $869 million, including $170 million to administer the cost of running the WC Board. Most of the rest is for the Special Injury Fund, he said. He said the 1996 legislation required a study of the Special Injury Fund to be conducted, and questioned whether it is necessary. He said a pie chart of injuries showed only 1 percent are handled by the Special Injury Fund. How does that reconcile with some $700 million in assessments, he asked.

Dudley called for “more transparency” of the various Funds and the WC Board. By contrast, he said New York’s unemployment insurance system, run by the Department of Labor, can tell you precisely what is paid out. “You can’t find this from the WC Board,” Dudley said. He said there should be “greater access to information” from the Board. “You can’t get a breakdown of workers, doctors, lawyers, who got what.”

Under questioning by Sen. Maziarz, Dudley talked about “typical” WC cases saying they usually involve construction industry accidents, but that in many cases these workers are told to take sick time and not file a WC claim. He also responded to Maziarz’ question about whether the improvements at the WCB have resulted in more expeditious settlements. “No, we have not seen a perceptible change,” he said, adding that maybe it is because trial lawyers only get involved in the more serious cases.

Retail Council. Potrikus said his organization represents 5,000 stores. While WC costs used to be more of a burden for contractors, the building trades and manufacturers, Potrikus said this now is becoming true for retailers. He said currently retailers are excluded from the law’s provisions that allow employers to use managed care for WC cases, and said the retail sector should be included in both this and the return-to-work provisions. He urged more expedited hearings, saying NYS is slow by comparison to other jurisdictions. Potrikus said the retailers are looking at the permanent partial benefit.

NY Workers’ Comp Alliance. This group is an affiliation of attorneys and others knowledgeable about WC law. Sciortino said its attorneys represent 150,000 injured workers. Their greatest concern is blaming the costs on permanent partial. He said he rarely hears any challenges to the insurance industry. Curtailing permanent partial, he said, will force workers into poverty and onto welfare at taxpayer expense. He said the permanent partial benefit should support people as they are getting back to work, not be cut off.

Rosasco harked back to the Business Council’s plea to “take the emotion out” of the WC debate, saying it can’t be done. There is a misconception, he said, that the people on permanent partial could really return to work. He said in his experience the vast majority of people who qualify for SSI—Social Security Disability—are classified as “permanent partial” cases by NYS—not “permanent total” disability cases. This is ironic because of the very tough SSI standards, and the fact that SSI is for the totally disabled. “The bar in New York for permanent total disability is set so high that many ‘permanent partial’ individuals can do hardly anything,” he said, adding that out of thousands of cases he has dealt with “I can count on the fingers of one hand” the number that were determined to be permanent total. He said that the SSI standard is much lower than New York’s “permanent total” standard.

Under questioning, Rosasco said the system is “much quicker” and more efficient than before—but that the WCB can “play with the numbers.” He gave an example involving the hearings for medical treatment above $500. He said workers should be able to go before a law judge quicker and not be forced to go through the conciliation process. “It’s pointless delay, because the insurer won’t agree during conciliation,” he charged. “The longer it takes to get appropriate medical care, the longer the return-to-work is delayed.

Asked by Sen. Maziarz where the permanent partial benefit should be set, Rosasco said it should be at 2/3 of the average weekly wage, which was the case with the current $400 when it was adopted back in 1992. Today, he said, the correct figure would be around $625. “So, the Governor’s proposal [$500] actually puts workers back from where they should be,” he pointed out. He also recommended the figure be indexed so the erosion of benefits doesn’t happen again.

NFIB. Alesse said he represents 20,000 members, and that business is “overburdened” in New York by a number of factors. He spoke against current Labor Law Section 240/241 provisions. Alesse said 42 states cap permanent partial benefits, and in doing so New York would just be joining the majority of the country. He pointed out that New York already caps benefit duration for scheduled awards, so it would just be extending this approach to the unscheduled injuries. He repeated the statistic that 12 percent of injuries generate 73 percent of costs, saying “something is out of balance.” He called New York “an outlier” and asked to just “make us like other states.” Alesse said small business owners are equally emotional about the business climate. NFIB is OK with bigger benefits, but “business has to get a net savings,” he said.

Under questioning about how to deal with people who are permanently injured, Alesse said they should be able to retrain over 10 years. “The 42 states that cut off such benefits are not uncivilized places,” he said.

NY Committee on Occupational Safety & Health. NYCOSH is a coalition of unions, lawyers, and health professionals whose primary concern is preventing occupational disease and injuries. “Prevention is a win-win strategy,” he said.

Sufro cited the 1972 Nixon commission on workers’ comp had recommended that, by 1975, states should index benefits at 100 percent of the average weekly wage. He said 46 states currently do index their benefits, and most are at 100 percent of the average weekly wage.

Sufro pointed to the science of ergonomics as a proven way of reducing injuries: “the data is clear.” He gave some examples of WC cost reductions by organizations that adopted ergonomic practices. He also said employers are not adequately training new workers, especially young workers, in the hazards of their worksite, saying NY needs better enforcement of child labor laws.

Sufro said the state’s occupational health clinics provide good early detection of occupational disease.

He and Sen. Maziarz then discussed examples they both knew of in the nursing home sector, and Sufro deplored the fact that Congress pulled the plug on ergonomic standards that had been slated to go into effect. “These programs do work,” he said, adding that every $1.00 invested in savings would yield a $3.00 savings in cost.

MACNY. Wolken said his group is the largest manufacturers’ association in New York state. Manufacturers do have options, he said—they can move out of New York. He said his members need to see a 15-20 percent reduction in workers’ comp costs. His other suggestions included getting workers medical assistance more effectively; a light-duty return-to-work program, reducing administrative difficulties and using technology in managing the system. “Prevention is central,” he agreed with Shufro. He said the system should encourage/incentivize employers, especially small manufacturers. He said, “we have to look at permanent partial” and recommended adopting objective medical guidelines. “It’s time to talk about real reform,” he said—but added that maybe some of this can be done administratively.

A give and take ensued. All agreed that a thorough, objective study of the numbers and accurate comparisons to other states is needed. The business groups were needled by the WC Alliance about why they never seem to point the finger at insurers.

One key point made by Shufro, which PIANY is following up on, is that apparently some provisions of the 1996 legislation have never been implemented. They were intended to provide a discount for employers with safety programs, including a safety equipment credit. He also said the experience mod is set too high for the requirement that employers hire safety consultants. The WC Alliance concurred, saying that among Latino workers there’s “not a lot of safety training.”

Maziarz said a bill has passed out of Committee and is on the Senate floor that would provide incentives for safety.