Workers' Comp Reforms Draw Praise and Criticism
BUFFALO, N.Y. -- Reforms passed in the state budget are called the most significant changes in workers' compensation since it began a century ago. Proponents say it could save hundreds of millions of dollars, but opponents say it takes that money away from injured employees.
Those in favor of reforms say workers' comp claims cost $10 billion each year across New York state; the 3rd highest of any state.
"That is a hidden tax that prevents businesses here from succeeding, hiring, and investing. That's anybody with a non-profit, but it is also school district, municipalities," said Greg Biryla, Unshackle Upstate executive director.
"We have 250 employees, and we spend over $1.5 million a year on workers' comp," said Paul Vukelic, the Try-It Distributing president & COO.
Costanzo's Bakery spends as much money on workers comp as they do on capital improvement," said Dottie Gallagher-Cohen, the Buffalo Niagara Partnership President & CEO. "So what that means is they can't invest in more capital to create more jobs because they have this inflated cost of workers' comp."
That's why State Sen. Chris Jacobs said workers' compensation reform was non-negotiable when it came to the state budget.
"Your revenue source is limited, and your costs rise. We don't have the choice to raise prices and cut personnel like the private sector does," said Kevin Horrigan, the People Inc. associate vice president.
The new legislation institutes a 2.5-year timeframe for employees to claim temporary benefits, unless they can prove that they need more time to heal from an injury. The threshold to receive permanent benefits has also been lowered to allow more workers to qualify. The reform creates an updated prescription drug formula, with new generic medications.
The major change is that the legislation will require the worker's compensation to adopt new medical impairment guidelines that update how much money employees get for an injury, based on advances in medicine.
Proponents say the legislation will save around $700 million every year.
"What's a shoulder worth, that's all been updated, so that's where some of the savings will be. People who get hurt are still going to get the money to take care of their injury. What these changes will do is take some of the abuse out of the system," said Gallagher-Cohen.
Lawyers we spoke with who represent hurt employees say they worry these changes could erode benefits for injured employees.
"There are no outdated loss guideline. A finger is still a finger. A wrist is still a wrist. A shoulder is still a shoulder, and when they are injured and permanently injured, there should be compensation for that," said Robert Voltz, an attorney for Cellino and Barnes.
"We foresee there being a significant impact on injured workers with reduction of benefits. Hospitalization times are less. Recovery periods are less, but anatomically and physically, the injury is still the injury," said another attorney, Greg Connors, a co-founder of Connors and Ferris law firm.
The Workers' Compensation Board has until the end of the year to work with doctors, patients, insurance companies, and businesses to draft new medical and compensation guidelines.