Assessments: The Facts, Not the Fiction

            On February 22, 2012, an arm of Public Employers Risk Management Association (PERMA) released a “report” claiming that workers’ compensation assessments are a “tax” that is dramatically increases employer costs.  This “report” was filled with misleading statistics and misinformation, to which the WCA responded on March 16, 2012.

            On September 10, 2012, PERMA released a “new” report that simply repackages its prior claims, perpetuating the same factual and legal inaccuracies.

            The WCA believes that sound public policy must be based on accurate information, and not mischaracterizations of the facts and misstatements of the law.  As a result, the WCA has again responded to PERMA’s release and set the record straight.

            The key points of the WCA report are:

-           Assessments are not a “tax.”  To the contrary, most assessments are a reinsurance system that benefits employers and insurance carriers.  According to PERMA’s own report, nearly 80% of assessments relate to the Special Funds, which reimburse money to employers and carriers.  Almost 98% of the money employers and carriers pay in assessments related to the Special Funds is returned to those same employers and carriers. 

 

             -           Assessments are not skyrocketing, and have historically fluctuated in a narrow range.  In fact, based on Governor Cuomo’s action, assessments went down between PERMA's February, 2012 and September, 2012 releases.

 

                      The 2007 reform legislation will ultimately result in a substantial reduction in assessments through the elimination of the Second Injury Fund.  The WCA calls for the elimination of the Reopened Case Fund in order to further reduce assessments.  It is notable that PERMA has not called for the same action.

 

 Read the full report here.

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