The NY Times published a series of articles that paint a bleak picture of Workers’ Compensation fraud and abuse in New York State: everything from exaggerated medical reports of minor back pain to seriously injured workers stuck for months. in a Kafkaesque nightmare of delays. . Many injured workers eventually give up fighting and are left without medical care or are forced to pay out of pocket.
But the Times completely missed the other victim: the New York businesses and nonprofits that pay Workers’ Compensation bills. Whatever workers, doctors, and insurance companies do, the bosses always lose.
Every time there is a claim, whether the claim is legitimate or fraudulent, the employer is left with inflated reserves that insurance companies set aside to cover costs. And claims are only a small part of the problem. Between 40% and 60% of employers overcharge their premiums due to “overrides” (experience rating changes), calculation errors, and more.
In today’s reformist society, there is an undercurrent of anti-business attitude. So there is little sympathy for corporations. But it’s not just businesses that are affected. Many struggling organizations, schools, and hospitals continually lose thousands of dollars due to excessive overpayments. But that’s not on the cover.
Injured workers and shoddy insurance carriers are always in the news. They are more fascinating than the stories of employers paying the bills and overcharging you on your premiums. Therefore, the Times does not report when we look at companies’ workers’ compensation insurance premiums and find errors and omissions that lead to large reimbursements.
But employers who get reimbursed through Compensation Refund Co. don’t care that their photos don’t appear in the New York Times. They are happy with refunds of tens of thousands of dollars. Sometimes millions of thousands.
I’d like to see the Times do an investigative report on the state of business in today’s economy. The 2008 reform of the New York State Workers’ Compensation laws brought positive changes to the system. But not enough. As Kenneth Adams, president of the New York State Business Council, told the Times: “New York State, before reform, was one of the most expensive states in the country for workers’ compensation. With these reductions in premiums “The cost of workers’ compensation for most employers has fallen in line with the average for other states. But if you’re in manufacturing, it can still be a significant cost.”
For their part, businesses should get their own stimulus package, by extracting their Workers’ Compensation insurance premium overpayments for rebates. They could find themselves with five- or six-figure refunds… and save taxpayers billions.
