Workers’ Compensation & You

1. Workers’ Compensation & You

2. The Long Island Federation of Labor AFL-CIO

3. Overview of the New Workers’ Compensation Law This presentation is a guide to the new changes in the reform law signed by Governor Eliot Spitzer on March 13, 2007. Lets’ begin!

4. Changes in the New Comp Law • Signed on March 13, 2007 by Governor Spitzer • Was hailed as an “accord” by the Senate, Congress, the AFL-CIO and the Governor. • Many changes were made including increasing the minimum weekly rate, indexing future payments and capping permanent partial disabilities. Lets break it down.

5. Increases to Weekly Rates • Maximum rates for temporary total, temporary partial, permanent total and permanent partial increased to: $500 per week for accidents or dates of disablement on or after 7/1/07; $550 as of 7/1/08; $600 as of 7/1/09; and two-thirds of the state average weekly wage as of 7/1/2010, and it will change annually thereafter. Indexed rates are effective for accident & dates of disablement which occur on or after March 13, 2007. • Raises the minimum rate to $100 effective 7/1/07.

6. Permanent Partial Disability Limits • Creates a schedule of benefits for permanent partial disability only. The schedule of time limits is as follows: Loss of wage earning capacity: • 95-99% = 525 weeks • 91-95% = 500 weeks • 86-90% = 475 weeks • 81-85% = 450 weeks • 76-80% = 425 weeks • 71-75% = 400 weeks • 61-70% = 375 weeks • 51-60% = 350 weeks • 41-50% = 300 weeks • 31-40% = 275 weeks • 16-30% = 250 weeks • 1-15% = 225 weeks

7. Provisions • The Law creates a presumption that need for medical treatment continues after the relevant time limit is reached regardless of the cap. • The law directs the Board to create an independent outside agent to determine questions of medical treatment. • The new law requires the Commissioner of Labor, with input from an advisory council, to issue a report regarding retraining and returning to work of permanently partially disabled workers.

8. New Changes • Death benefits are increased at the same rates as disability. • Persons incarcerated based on a felony conviction are disqualified from benefits while incarcerated and may apply for reinstatement upon release.

9. Enforcement • Creates a sliding scale of penalties for failure to secure workers’ compensation insurance. Employers in violation for failing to provide coverage five or less employees will be charged with a misdemeanor & a fine of $1,000 to $5,000. Greater than five employees is a Class E felony with a fine of $5,000 to $50,000. • A second offense (apparently regardless of number of employees) is a Class D felony with a fine of $10,000 to $50,000. • The new amendment criminalizes the failure to keep accurate payroll and job classification records as a Class E felony with a fine of $10,000 to $25,000. • The chair of the Board is authorized to issue a “stop work” order for failure to secure workers’ compensation insurance and prevents those in violation from bidding on municipal contracts

10. Medical Benefits • Amendments include specifying dental treatment and directing the Board to promulgate fee schedules to include dental treatment and medical devices. • Requires carrier to pay a pharmacy or reimburse a claimant for prescription medication in accordance with a fee schedule (or at usual and customary rates if no fee schedule exists) within 45 days unless the claim is contested or the medication is not causally related. If the carrier does not pay, or does not pay the full amount, it is required to provide a written explanation. Late payments are subject to interest. However, employers or carriers may contract with pharmacies and require claimants to use those pharmacies as long as the pharmacy is local for the claimant or offers mail order service. • The law directs the Board to establish a pharmaceutical fee schedule. Fee schedules for dental services, durable medical goods, and prescription medication should streamline obtaining these services. The imposition of a time limit for payment or explanation of medication bills has been much needed, although enforcement will be key. Since the carrier cannot choose our medication, the change here is basically the loss of choice of pharmacy.

11. Diagnostic Testing • The authorization limit for special services (diagnostic testing, surgery, etc), is raised from $500 to $1,000. This is a positive change because common tests such as MRI’s are more than $500 but less than $1,000. • Authorizes insurers to contract with networks for the provision of diagnostic testing and to require claimants to utilize those networks if there is a location a reasonable distance from the claimant and if the carrier advises the claimant of the requirement to use the network in connection with issuing the “statement of rights” shortly after indexing. In addition, if a test costing in excess of $1,000 is authorized, the carrier must notify the prescribing doctor, who may then choose which facility in the carrier’s network is to perform the test. • The Board & State Insurance Department will make a list of accepted medical practices for each injury. As long as the doctor follows the accepted treatment list, s/he will not need to request authorization from the carrier. • ***************************************************************************

12. Additional Law Changes • Concerning appeals, the law is amended to clarify that the carrier must continue to pay for medical care and devices while an appeal is pending in the Appellate Division or an application for Full Board Review. • Section 21-a of the law, the temporary payment of compensation and medical statute that has been barely utilized, is also amended to include payment for prescription medication. • **************************************************

13. Section 32 Agreements • Section 32 is amended to specifically permit the Special Funds and the Aggregate Trust Fund to enter into Section 32 settlement agreements. Carriers are further required to make Section 32 settlement offers within 2 years after the claim is indexed or 6 months after classification with specific information as to how the settlement is allocated among indemnity, medical expense, and attorneys fees. The Board is required to create an office to process Section 32 settlement agreements. There are many provisions relating to this Section 32 management office that require additional review. • Requiring insurers to make payments into the Aggregate Trust Fund (ATF) will give them incentives to make Section 32 settlement offers to avoid making the ATF payment. If the carrier fails to make a reasonable offer, the claimant now has the option of forcing the carrier to make the ATF payment and then pursuing a Section 32 settlement with the ATF instead of the carrier.

14. “Safety Nets” • Return to Work • Reports to many branches of government on the number of people classified as PPD that actually returned to work, the return to work programs used, and costs. • Total Industrial Disability (TID). At any time the claimant may reapply to be reclassified if they are a PPD. • Extreme Hardship. In cases where an extreme hardship exists, the claimant may request to be reclassified as PTD, or request additional weeks of benefits. • Safety Net Annual Reporting. Various agencies must report on the number of PPD (partial) , PTD (total) and TID and track the claimants for safety, and re-evaluate the program if it is not working.

15. Further clarification • It permits claimants who are more than 80% (not 80% or more) disabled to apply for reclassification to total disability or total industrial disability status within the year prior to the expiration of permanent partial disability benefits based on “factors reflecting extreme hardship.” • The law requires reporting by the commissioner of labor regarding claimants retrained, cut off by time-limits, and those re-classified as totally disabled. This new provision will depend largely on the definition of “extreme hardship,” the interpretation of total disability and total industrial disability by the Board and the number of workers more than 80% disabled.

16. Effective Dates of the Law • The act is to become effective immediately upon signing, March 13, 2007. • The time limitations on permanent partial disability claims apply to accidents and dates of disablement on or after the effective date of March 13, 2007. • Enforcement provisions take effect on the thirtieth day after this law takes effect for offenses committed on or after such date. • Pharmaceutical, radiology and prosthetic schedules, drug & alcohol prevention and return to work programs take effect 120 days after the effective date. • Death benefits provision takes effect January 1, 2008.

17. Thank You For Your Time!We will now take your questions. This Presentation has been brought to you by The Long Island Federation of Labor. Creative arrangement by: Marianne Pizzitola