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Member, Beacon International Group, Ltd.
INSURERS AND EMPLOYERS alike have good reason to be cautiously optimistic about New York Gov. Eliot Spitzer's proposed workers compensation reforms.
Even as the governor's compromise package would raise weekly benefits for injured workers, it promises to reduce employer costs by 10% to 15% beginning next year--and yield even greater savings over time.
Is that really achievable? Laudable as such results would be--and employers, labor unions and insurers generally are happy with the legislation--insurance industry sources note that Gov. Spitzer has not provided actuarial evidence to support such projections. As is usual in legislating, the devil will be in the details.
Workers comp is an expensive proposition for employers even in states with compensation systems that are highly efficient. Key to helping New York reduce the costs of its system is limiting the length of time a claimant can receive permanent partial disability benefits. The Business Council of New York State says 42 other states already have limits on PPD benefits.
As attorney general, Mr. Spitzer achieved swift--if not always palatable--results. We think his first major piece of insurance legislation as governor would benefit employers and insurers, and we hope New York's state lawmakers will approve sensible workers comp reform sooner rather than later.