The document discusses the economics of workers' compensation in New York State, noting issues such as increasing medical and indemnity costs, an aging workforce, and the state's high expense for employers. It highlights changes from 2007 reforms, including modifications to benefit structures and future obligations for carriers, and emphasizes strategies for effective accident reporting and claims management. Recommendations are provided for implementing return-to-work programs, maintaining communication with claimants, and analyzing claims' impacts on experience modification factors.

1. NYS Workers Compensation
Mark V. O’Brien
Claim Manager
Lawley Insurance
716 849-1504
MOBrien@lawleyinsurance.com

2. Economics of Workers Compensation
 Inflation relative to WC Benefits
• Indemnity increasing @ 2% per year
• Medical increasing @ 6% per year
 The workforce is aging (average @ 49 years) resulting in
fewer but more costly injuries

3. NYS Workers Compensation
 NYS is the 5th
most expensive state for employers
 2007 Reform measures were attempts to level the playing
field between states but:
 Loss Costs in 2013 are actually higher than in 2007
 Increase in Average Weekly Wage
 Shift from lower cost claims to higher permanent partial
disability claims

4. NYS WC Cost/Benefits 2007 to Present
 Permanent Partial Disability claims, carriers required to
deposit present value of future stream of indemnity into
the ATF
 Medical Treatment Guidelines were enacted for multiple
body parts
 Elimination of “lifetime” permanent partial disabilities
 With increase in Average Weekly Wages, SLU’s
have doubled

5. Benefits: 2007 to Present
 2007 Law: The Changes
 Increase to maximum and minimum weekly benefits
 Minimum increased from $40 to $100 effective July 1, 2007
 Maximum increased according to following schedule
Effective Date Maximum Weekly Benefit
July 1, 2007 $500
July 1, 2008 $550
July 1, 2009 $600
July 1, 2010 2/3rds of AWW: $739.83
July 1, 2011 $772.96
July 1, 2012 $792.07
July 1, 2013 $803.21

6. Present and Future NYS WC Landscape
 3/1/14 WCB requires electronic reporting to go
paperless and become more efficient
 Requires carriers to invest in software and potentially
more staff
 Could result in increased caseloads and less focus
on quality
 ACA could result in higher reimbursements for WC
vs Medicare and Major Medical

7. Pre-Accident Risk Management Efforts
 Utilize your Loss Source Analysis (Trending Report)
to identify problem areas
 Implement post offer physical assessments to
determine if the potential hire can do the work
 Develop strong relationships with Occupational
Health Facilities

8. Craft Special Handling Instructions With The Carrier
 Where possible, require a dedicated WC adjuster
on your account
 Carrier system access during and after policy
 Reserve notifications above $25k
 Settlement Authority on settlements above $50k
 Nurse case management and pharmacy benefit
management

9. Accident Investigation And Claim Reporting
 Active participation in accident investigation
 Ask the employee to show you how/where the accident
occurred
 Designate a WC Coordinator for supervisors to
report claims
 Most effective WC Coordinators have an interest in the
fine details of each claim
 Once the claim is reported to the carrier, direct all
claimant questions to that carrier

10.  Per WC Section 110, you can self pay medical only claims
 Less than 3 Medical treatments
 No lost time past the date of injury and 1 day
 Prevents these claims from being factored into the
underwriting decision
 Eliminates the claim exposure on your experience
modification factor
Self Pay First Aid Claims

11.  Participate in claim reviews and focus on disposition
strategy and reserve analysis
 Invite department heads to participate in the claim reviews
for claims that impact their specific department and overall
organization
 Question the carrier on use of Nurse Case Managers and
Pharmacy Benefit Managers
 Identify mitigation practices that will help reduce the
overall claim incurred (Paid + Reserve= Incurred)
 Subrogation (Loss Transfer and Third Party)
 Look to apportion claims to prior carriers where possible (Outside
your effective rating period)
Claim Reviews

12.  Provide a RTW program that brings employees back to
work as soon as possible in either temporary alternative
work or their full time job
 Maintain a library of RTW jobs in electronic format that
can be sent to the claimant doctor or an Independent
Medical Exam
 Integrate the RTW program into your collective
bargaining agreement
Return To Work Program (RTW)

13.  Familiarize yourself with the effect of your claims on your
experience modification factor
 Benchmark yourself against industry competitors
experience mod factors
 Ask your broker to provide a Mod Master Analysis of your
experience mod including trending reports on cause of
loss, injury types and the impact of individual claims on
your mod
Experience Mod Analysis

14.  Demonstrate empathy for the claimant
 Maintain consistent dialog (Medical status and RTW options)
 Try to be cordial throughout the claimants period of disability.
 Encourage use of a Wellness Program
Maintain Communication With The Claimant

15.  In hiring process, consider what other transferrable skills
the potential employee may possess (Academic or
vocational)
 In application process, exercise your rights to contact the
prior employers relative to work performance etc.
 Consider “Kitchen Table Economics” of potential hires
who may be injured
Additional Observations And Ideas

16. Legacy Workers Compensation Claims
 Understand the impact on your current and future
experience mod factors
 Trust claims may not impact your experience mods but
have a profound financial impact via joint/several liability
and thus annual assessments
 Lawley has developed a legacy claim management
services to assist in mitigation

17. Thank you.