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Efforts to reform workers’ compensation seem to be gaining steam in New York, where a flurry of competing proposals attempt to address the same problem: the system is simultaneously uniquely expensive and uniquely stingy. Unions brought the issue into play this session by placing an increase in benefits at the top of their legislative agenda. It would be the first increase in 12 years. Insurance and business interests responded with a push to contain costs, which in New York are 34 percent above the national average, largely because of a “permanent, partial disability” provision that allows workers to collect for life. Proposals are pending in both houses. On Tuesday, Gov. George E. Pataki weighed in with one that his staff said would achieve the dual goals of an increase in benefits and a decrease in business costs. Wednesday, the Senate Labor Committee held a public hearing on four of the legislative proposals. The panel heard contradictory testimony from labor leaders, insurance executives, the business and medical lobbies, and Pataki administration officials trying to sell the governor’s plan. The only consensus that emerged is that New York’s compensation system is a mess. Essentially, in New York, injured workers generally collect considerably less, but sometimes for considerably longer periods, than laborers elsewhere. So the benefit to workers is substandard even though, according to figures compiled by the National Council on Compensation Insurance, the cost in New York is 72 percent higher than the national average. As it now stands, injured workers can collect a maximum award of $400 weekly, one of the lowest sums in the nation, but only about 3 percent of those hurt on the job get even that much. At the same time, though, the “permanent partial disability” provision yields a perpetual benefit for workers and saddles business with an uncontained expense. Officials say permanent partial disabilities account for less than 13 percent of all claims and 77 percent of the cost. Pataki would bring an end to lifetime compensation, limit benefits to about 10 years, increase the maximum weekly benefit to $500 by 2007, establish a $250 weekly minimum, reduce business costs by a projected average of 15 percent through tiered benefit levels, prohibit benefits to prisoners, encourage dispute settlements and discourage litigation. At Wednesday’s Labor Committee hearing, Workers’ Compensation Board Chairman David P. Wehner suggested the governor’s proposal is a spark designed to ignite progress on an issue high of legislative and executive priority. “I believe we are at the crossroads of an historic opportunity to provide additional protections for injured workers without unduly affecting the business community,” he said. But Denis M. Hughes, president of the 2.5 million-member New York State AFL-CIO, branded the governor’s proposal a sell-out to the insurance industry. He demanded an increase in benefits and strongly opposed eliminating permanent partial disability payments, saying that a permanent injury warrants a permanent benefit. Hughes said he was “bewildered by the need to actually be here today to defend something as basic as a raise in benefits for injured workers who fight each and every day to make ends meet while insurance companies continue to financially prosper at their expense.” BROAD EFFORT Attorney Joseph A. Edwards, an insurance industry consultant, disputed Hughes’ contention that the issue involves corporate greed. Edwards said the industry joins labor in support of a benefit increase. But he said any increase in benefits should be part of a broad reform effort that addresses some of the peculiarities that make New York’s system inefficient, ineffective and susceptible to manipulation and fraud. “There is a real opportunity here for a win-win,” Edwards said. Lawrence T. Gilroy III, chairman of the New York Workers’ Compensation Action Network — a business coalition that played a key role in the 1996 reform movement and was recently reactivated to address the latest effort — said the 1996 reforms averted a crisis. However, he said, “New York is again in a position where we are not competitive with other states � New York’s costs are way out of line.” Gilroy declined to endorse any of the pending proposals. However, he said the group is particularly eager for time limits on permanent partial disability benefits. Labor Committee Chairman Senator Guy J. Velella, R-Bronx, suggested that any measure curtailing benefits after a certain period of time must be coupled with programs to retrain injured workers. “We have to do more than give the injured worker a round-trip ticket to Lourdes and hope that does the trick,” Velella said.

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