Despite the desired purpose of creating a more streamlined, expeditious system to benefit both business and injured workers, the bill will likely result in additional litigation. In fact, the New York Worker’s Compensation Alliance recently posted the following statement on its Web site, www.nyworkerscompensationalliance.org: “After receiving input from both the Business Council of New York State and the New York AFL-CIO, NY State Insurance Department Superintendent Eric Dinallo has released his cover letter and proposed ‘Streamlined Docket Regulations’ which substantially impact the rights of injured workers in New York — some for the good, some for the not so good. In addition, some of the proposed regulations conflict with existing statutory law.” A copy of the new bill can be viewed on the Alliance’s Web site. In order to evaluate its implications and highlights, a review of Workers’ Compensation law over the past 93 years is helpful.
Key dates in comp history
• 1914 – New York State Workers’ Compensation Law passed
• 1945 – Second Injury Fund created
• July 1, 1992 – Last changes to increase benefits under the system became effective; maximum rate of compensation changed to $400; statutory minimum rate of compensation set at $40.
• June 1996 – Workers’ Compensation Board medical guidelines published
• March 13, 2007 – New bill signed into law, making dramatic changes to the above provisions.
Highlights of new legislation
Sections 15-8 and 14-6:
• Will end the ability to mitigate losses after 260 weeks with reimbursement from special funds under §15-8(d), or shift liability of indemnity payments for what is determined to be concurrent employment (multiple employments at the time of the accident) to special funds for reimbursement under §14-6.
• As of March 13, a $250 filing fee must be paid to the WCB Finance Unit for the filing of a C-250 (claim for reimbursement under Section 15-8[d]), as well as the filing of a C-251.3 (claim for reimbursement under Section 14-6).
• After July 1, 2007, any claim with a date of accident, disablement, or death will not be eligible for §15-8(d) or §14-6 reimbursement.
• As of July 1, 2010, no C-250 or C-251.3 can be filed, and all proofs for claims under §15-8(d) and §14-6 must be filed.
• As of March 13, 2008, a request for reimbursement under §15-8 or §14-6 must be made within one year of the payment of the expense, or whichever is later. This is very important for mitigating liability. (Those who have already secured relief from special funds under §15-8 and §14-6 must act in a relatively quick manner to secure reimbursement before the opportunity is lost, and so that they can maximize the benefit prior to March 13, 2008, for older claims.) Soon, the carrier and employer will be responsible for benefits based on both the average weekly wage solely based on the primary employer and the concurrent employer when §14-6 reimbursement is eliminated.
Changes in compensation ratesAs of July 1, 2007:
• The maximum benefits for compensation will increase.
• The statutory maximum will be raised to $500 for claims established with an accident, disability, or death date between July, 1, 2007, and July 1, 2008.
• There will be an incremental increase in the maximum rate of compensation to $550 for claims established with an accident, disablement, or death date between July 1, 2008, and July 1, 2009, and $600 for claims established with an accident, disablement or death date between July 1, 2009, and July 1, 2010. Adjustments are in place for accidents on or after that date.
• A statutory minimum for compensation for claims established with an accident, disablement, or death after July 1, 2007, will increase to $100. An exception: If the average weekly wage established falls below $100, the claimant would only be entitled to the equivalent of their full wages.
Permanent partial disability
Reserves on claims should be smaller with the reform bill cap on permanent partial disability. Unfortunately, the effect of the cap cannot truly be seen until the new medical guidelines are enacted and put in place.
For example, a permanent partial disability of 1-15 percent will equal 225 weeks’ entitlement to benefits. The bill goes through 12 stages of disability to place a cap on indemnity benefits. They range from 225 weeks (4.33 years) to 525 weeks (10.10 years).
There is no cap on medical liability. However, the new cap on permanent partial disability beginning at 1 percent begs the question of whether the goal of less litigation will be served — especially given the fact that a finding of permanent partial disability leads to the inference that the work injury is the cause for subsequent loss or reduction in earnings.
In a case where the statutory minimum applies, a finding of 1-15 percent permanent impairment would equal a payment of $22,500.
With each stage increasing by 25 weeks of benefits, both sides would have a monetary interest in litigation. Using the example of the $100 statutory minimum, this equates to a $2,500 difference per stage. With the $500 maximum statutory rate, we are dealing with a change of $12,500 per stage. When the maximum statutory wage is $600, each stage represents a $15,000 difference.
It is difficult to predict what variables will be written into the medical guidelines to justify the rate fluctuations, and whether quality is better than quantity in the scheme of permanent partial disabilities.
On that note, the new stages of permanent partial disability raise the attraction of a classification versus a schedule loss of use in many cases involving injury to an extremity.
For example, an injured worker who undergoes a partial meniscal surgery would generally be entitled to a 7.5 percent schedule loss of use. Using the statutory minimum of $100, this would involve a schedule award of $2,160 (21.6 weeks of benefits). On the other hand, if this injury is considered a permanent partial disability of less than 15 percent, the claimant would be entitled to 225 weeks of benefits — $22,500, assuming they did not return to work.
Payment into aggregate trust fund
Private insurance carriers are directed to pay in to the aggregate trust fund the present value of classification costs. The exceptions to this rule are self-insured employers; the state Insurance Fund; and cases where §15-8 is established or pending, where a third party action is pending, pending §114-a claim, or when there is no lost time when the claimant is classified.
Effective March 13, a §32 offer must be made within two years of the indexing of a claim, six months after classification, or within six months of establishment or entitlement to benefits for all beneficiaries in a death claim. The §32 offer must break down the portions allocated for medical, indemnity, and attorney’s fees.In a claim with §15-8 reimbursement, the Waiver Agreement Management Office can negotiate and settle a claim without notice to or approval by the carrier.
Section 114-a fraud claims
The Workers’ Compensation Law has always attempted to take a strong stance on fraud. The reform bill provides for sanctions against attorneys on both sides who institute or continue litigation without reasonable grounds on a fraud claim.
Such a sanction may bring the undesired effect of having more attorneys settle fraud claims.
A “rocket docket”
A claim with a date of accident, death, or disablement on or after March 13, 2007, that has unresolved issues one year after being raised will be sent to the expedited hearing part. (In the past, expedited hearings were used only if issues remained two years after being raised.)
Any adjourned case is brought back to the calendar within 30 days. A penalty for an adjournment not found to be an emergency is $1,000 against the attorney appearing for the employer or carrier or $500 against the claimant’s attorney.
This possible penalty usually has the effect of forcing the parties into reasonable compromise. However, many times, the information leading to unresolved issues still is not available at the time of the expedited hearing.
More to think about
It is difficult to assess the ramifications of the new reform bill to the worker, employer or carrier until the new Workers’ Compensation Board Medical Guidelines have been produced.
A March 13 letter from Gov. Spitzer to the acting superintendent of the Department of Labor and the chair of the Workers’ Compensation Board, stated that the goals of the reform and design of the new medical guidelines would “minimize factual conflicts and the need for battles of experts before the board.”
Practice Areas 
