December 7, 2012
I am astonished by the amount of misinformation about workers’ compensation insurance being given credence by the Rochester Business Journal and other business leaders who should know better. The recent articles and essays I’ve read (e.g., Sandra Parker’s Nov. 16 On Business column, “So far, worker’s comp reform has failed employers in N.Y.”) are misleading at best and irresponsible and manipulative if taken at face value.
The reality is we will rarely if ever see the alternative perspective in pages like these. Injured workers are not organized to defend themselves, and there are far fewer of them than there are businesses and associations that protect businesses’ interests.
But I believe there are honest employers who are open to hearing the truth-business owners who recognize the risks their employees take on their behalf every day and who recognize the lifelong impact a disability could have on a person who earns $400 to $600 each week, the typical individual who finds himself or herself applying for workers’ compensation.
The Rochester Business Alliance and Unshackle Upstate, in their quest to influence elected officials and business leaders, are perpetuating propaganda that is simple to dispel.
First, the Rochester Business Alliance, in its own lobbying on the 2007 Workers’ Compensation Reform Act, helped establish a cap on the total income an injured worker would receive. Cost savings related to that cap will not begin to be realized until mid-year 2013, so the simple fact that the RBA now pretends to be surprised that the full cost-savings potential of the last reform has not yet been realized is ridiculous. And to push for further reform without enabling the initial reform to bear fruit is irresponsible.
But most reprehensible is the real motive most likely behind the RBA’s and Unshackle Upstate’s aggressive misinformation campaign: the benefits insurance companies will realize from the proposed increased regulation.
Business owners will see minimal, if any, benefit from the latest reforms being pursued. However, insurance companies will benefit significantly, simply from the way the money flows through the system. With more money in the system and their costs reduced, insurance companies will be able to leverage the float to further increase their profits.
The workers’ compensation system is a fundamental part of the social safety net, and fair compensation for injured workers should not be sacrificed to increase profits for insurance companies.
It is easy to vilify workers’ compensation insurance. As a business owner, I recognize the tendency to lament the taxes and insurance we pay in New York. However, I also believe we deserve the straight story; propaganda disguised as advocacy should not be accepted.
If we truly want to contain costs for employers, we should demand transparency from insurance companies on the unverified cost projections they used to justify premium increases. And we should demand to see the projected cost savings if the 2007 reform is allowed to bear fruit.