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Wednesday, October 16, 2013

Too Much Temptation To Do the Wrong Thing

The business of workers' compensation in New York, and the economic tension it generates, is the focus of a commentary by the publisher of Work Comp Central, David Depaolo. Today's post was shared by WorkCompCentral and comes from

The problem with workers' compensation being funded and managed by private interests is that there is simply too much temptation to do the wrong things for the wrong reasons - usually those reasons involve profiting at the expense of everyone else.

And so it seems in New York where an associate attorney in the State Workers' Compensation Board General Counsel's Office said in an affidavit filed in New York Supreme Court Friday that improper cost-shifting by the state's workers' compensation carriers has caused the liabilities of the state's Reopened Case Fund to "spiral exponentially," of course at the expense of employers.

After the historical reform of New York's system by then Gov. Eliot Spitzer, that imposed the state's first duration caps on permanent partial disability benefits, carriers began settling the indemnity portion of claims, leaving medical treatment open.

Three years after the indemnity payments run out, carriers can then file claims with the fund providing medical evidence that the workers' condition has changed, thereby shifting the cost of medical care for injured workers over to the Fund.

The lawsuit in which the affidavit was filed was initiated by Liberty Mutual Insurance Co. and 19 of its sister insurers to block a section of Gov. Andrew Cuomo's 2013-2014 budget the close the fund on Jan. 1, 2014.

Coumo made closing the fund part of the "Business Relief Act" included in his $141.3 billion budget and predicted that closing the fund will save New York...
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