Western New York business leaders are praising the passage of workers’ compensation reforms in this year’s state budget.
On Wednesday morning, State Senator Chris Jacobs announced the reforms, which include:
- Reforming temporary benefit timeframes: A new general rule instituting 2.5 years for an employee to claim temporary benefits.
- New medical impairment guidelines for scheduled loss of use awards: The Workers’ Compensation Board is being required to issue new medical impairment guidelines by the end of 2017 to reflect advances in modern medicine that produce better patient outcomes.
- Creation of a prescription drug formulary: Doctors will be able to consult a new, comprehensive list of high-quality, cost-effective medications pre-approved for injured workers, including non-preferred drugs that can be prescribed with prior approval.
- Rebates for current year’s premiums: Year-end rebates will be issued for the premiums employers are already paying based on 2017 estimates, once administrators calculate final year-end savings.
“These reforms will make Buffalo and Western New York a more attractive place to do business, and help keep the revitalization of our regional economy going forward,” said Jacobs.
Reforms aimed at cutting workers’ compensation program costs for employers were enacted a decade ago, but were ineffective according to Executive Director Greg Byrla of Unshackle Upstate. Byrla said the burden of current costs can be absorbed by economies like those in downstate New York, but not by those in upstate.
“That is a hidden tax that prevents businesses here from succeeding, hiring and investing,” said Byrla. “And also [it] is a major deterrent when you talk to siting organizations who look for opportunities. It’s a major deterrent when choosing a location to bring a business.”
All-together, the new reforms are expected to generate a $700 million savings for New York employers, down from an overall $10 billion in annual expense.
Buffalo Niagara Partnership President Dottie Gallagher-Cohen said one of the driving factors making New York a difficult place to do business is that it is currently ranked third-highest in workers’ compensation costs in the country. 60 organizations came together across the state to advocate for the new reform, which Gallagher-Cohen called a victory.
“When we asked for businesses to sign on to our worker’s comp letter, the response we got was overwhelmingly swift and immediate from organizations that usually take a long time to make a decision about advocacy,” said Gallagher-Cohen. “So we know this was very important to our members, it’s very important to the community. It is a win. I’m anxious to see where we’ll show up on the rankings after all the reforms get put into place.”
Try-It Distributing President Paul Vukelic said the nature of his business keeps him and his more than 250 employees in New York State. He currently spends over $1.5 million a year on workers’ compensation – money he says can be spent in other places.
“It’s a real problem for us – has been for years,” said Vukelic. “We’re in a business where we have truck drivers and warehouse people that do a lot of heavy lifting and, certainly, you want the protections. We do have the protections for them here in New York State. However, when you’re the third most expensive state in the country with regard to worker’s comp costs, it makes it very difficult for us to do business.”
Vukelic said he’s pleased with the new changes, but said true reform still has yet to take place. He and Jacobs are hopeful that the 2017 budget serves as first step towards more comprehensive future reform.