WCA, NYCOSH Release State of the System 2016

On June 21, 2016 the WCA and the New York Committee for Occupational Safety and Health released Workers’ Compensation in New York State:  State of the System 2016.  This is the fourth in a series of white papers released by the two organizations in the past decade.

State of the System 2016 is based primarily on data obtained from the Workers’ Compensation Board in several areas, although there were many data points about which the Board declined to provide information.

 The conclusions and recommendations of the paper are:

  1. It appears that workers are generally able to file claims, although the Board’s inclusion of extraneous forms in its FOIL response precludes an accurate assessment of how many individual claims are being filed.  It is clear from the data, however, that workers who are not fluent in English face significant obstacles in claim filing.
    Recommendation:  The Board should review its compliance with the Governor’s Executive Order regarding language access.  Printed and electronic forms should be more readily accessible in multiple languages.  Outreach efforts to immigrant communities and worker centers should be significantly expanded to increase the visibility and accessibility of the workers’ compensation system to workers who are not fluent in English.
  2. The Board’s division of its file creation process into “assembly” and “indexing” sows confusion among injured workers and delays insurer response to claims.  It seems likely that the Board is simply not indexing many of the claims that are filed, notwithstanding its regulation to the contrary.  This defers the insurer’s obligation to accept or contest claims.  An additional issue is presented by the Board’s issuance of these complex notices in English, without regard to the injured worker’s language or literacy issues.
    Recommendation:  All claims should be indexed immediately upon receipt of a claim or employer’s report of injury and the filing of a medical report.  The language used on a Notice of Indexing should be simplified, and the information about rights and benefits under the law should be expanded.  Notices should be issued in the language spoken by the injured worker as indicated on his or her claim form.
  3. The Board’s use of Administrative and Proposed Decisions is instrumental in denying benefits to injured workers.  These documents do not provide adequate information to injured workers either about the benefits being awarded or their entitlement to further benefits.  They also suffer from the same deficiency as Notices of Assembly and Indexing, in that they use complex language and are issued only in English.  This has a significant impact on access to benefits by workers with language or literacy issues.  These issues are exacerbated by the Board’s recently adopted policy to issue no decision at all in certain cases and its apparent disregard of the statutory requirement that it schedule conciliation meetings prior to issuing Proposed Decisions.
    Recommendation:  The use of Administrative and Proposed Decisions should be discontinued.  Injured workers should be afforded a hearing before a WCL Judge in every case so that information about their rights and available benefits can be communicated to them in a meaningful fashion and in an appropriate language.
  4. The Medical Treatment Guidelines have resulted in a flood of variance requests, creating an enormous administrative burden for health care providers, employers, carriers, attorneys and the Board, while causing the widespread delay and denial of medical care.
    Recommendation:  The use of the Medical Treatment Guidelines should be restricted to the purpose outlined in the law, which is to “pre-approve” medical care.  The MTG should not be used to pre-determine or pre-deny the need for treatment, which is governed by existing statutory provisions.  This interpretation of the law would eliminate the extensive bureaucratic procedure created by the current regulations, and would enable workers to receive needed treatment while preserving the ability of employers and carriers to contest medical bills.
  5. Despite increases in the maximum weekly benefit rate and periodic one-time increases in the minimum benefit rate, wage replacement benefits remain inadequate.  Workers who are injured on the job suffer from significant uncompensated wage loss due to the inadequacy of workers’ compensation benefits, especially in cases of permanent partial disability under the caps.
    Recommendation:  The minimum benefit rate should be set at 25% of the maximum benefit rate.  This will reduce uncompensated wage loss for low wage workers.
  6. Schedule loss of use awards have not increased since 1992 for workers who earn less than $600 per week, and have not increased since 2009 for workers who earn less than $900 per week.  From July of 2015, the value of schedule loss awards will only improve for the 25% of workers who earn more than $1,200 per week.  Meanwhile, payments for time lost from work are deducted from these awards.  This includes wage payments that are returned to employers out of the injured worker’s award.
    Recommendation:  Schedule loss awards should be payable additional to wage loss benefits, as is currently the case under the Longshore and Harbor Workers Compensation Act and in many other states.
  7. The PPD caps have slashed payments to injured workers by 70% or more.  The impact of this was intended to be assessed by the issuance of an annual Safety Net Report to consider the impact of the PPD caps on return to work.  Regrettably, the Safety Net Report has not been publicly issued since 2008, the recommendations of the Return to Work Task Force have never been implemented, and the Board declined to provide any information on its policies or implementation of the statutory safety net provision.
    Recommendation:  The Safety Net Reports for the years 2009 through 2015 should be issued.  The recommendations of the Return To Work Task Force should be implemented.  The threshold for safety net eligibility should be reduced to 50% loss of wage earning capacity, and the Board should issue meaningful guidelines for safety net eligibility as suggested in the 2014 White Paper.
  8. The number of settlements under Workers’ Compensation Law § 32 is increasing for private carriers, especially as a percentage of PPD claims.  This creates savings for insurers as injured workers settle their claims out of economic necessity created by the PPD caps.  However, this trend does not apply equally to the State Insurance Fund and self-insured employers, who settle relatively few claims.  This is likely due to their exemption from liability to the Aggregate Trust Fund.
    Recommendation:  The Board should enforce the statutory requirement for employers and carriers to make mandatory settlement offers.  The Aggregate Trust Fund deposit requirement should be expanded to the State Insurance Fund and to self-insured employers.

WCA Opposes 9.3% WC Rate Hike; Business Council Supports It

On June 28, 2016, the New York State Department of Financial Services held a public hearing on the Compensation Insurance Rating Board’s request for a 9.3% hike in workers’ compensation costs.  The WCA, NYCOSH and others submitted testimony opposing the request, and WCA Chair Robert Grey appeared to testify against the insurer group’s request.

The bulk of CIRB’s filing was based on supposed increases in insurer costs related to permanent partial disability and schedule loss cases.  The WCA pointed out that the facts show that PPD costs have plummeted because of the PPD caps that were part of the 2007 reforms.  The WCA also showed that schedule loss awards have not increased for the vast majority of workers in five years.  For the past several years, only 25% of workers have seen increases in their schedule loss awards as a result of increases in the maximum benefit rate – and those increases have been small and incremental.

NYCIRB contends that indemnity claims are 40% of the claims in the system, and that 28% of indemnity claims involve schedule loss.  This means that schedule loss cases are about 11% of the cases in the system (.40 x .28 = 11.2).  Only 25% of those cases have seen increases in the past four years, which is 2.8% of the claims in the system.  Those increases have averaged about 2%.  As a result, cost increases in schedule loss cases are about one-half of one percent (2.8 x. 02).

Meanwhile, the Business Council of New York State also appeared at the hearing and testified in favor of increasing its own member’s insurance costs.  Ken Pokalski stated that “the system costs what it costs,” and that employers’ rates should be increased to account for those costs.  Pokalski also advocated for drastic reductions in awards for schedule loss and in payment for temporary disability from work, claiming that employers’ rates can always be scaled back later, after benefits are taken away from injured workers.