Control Workers' Compensation Costs
Issue Overview: This area of major cost impact on small businesses is a perennial battle between small businesses and the trial bar and organized labor. The costs associated with workers' compensation are a close second to the costs generated by health-care insurance premiums. NFIB worked as part of a business coalition to defeat efforts to repeal this critical portion of the 1993 workers' compensation reforms. This legislation will repeal a key element of the 1993 workers' compensation reforms by removing the cap on the amount of discretionary benefits workers' compensation commissioners may award. This proposal will gut the reforms and return high costs and incentives for fraud to the system.
Current law allows commissioners to provide discretionary benefits that are fair and just for claimants. The trial bar has sought and continues to seek higher unlimited discretionary benefits that will provide more latitude for the lawyers share of awards. Senate Bill 217, An Act Concerning Discretionary Benefits Under the Workers' Compensation Act, would increase small business workers' compensation premium's dramatically.
NFIB also opposes Social Security offsets in the worker's compensation system: Senate Bill 25, An Act Concerning Social Security Offsets Under the Workers' Compensation Act. This provision would remove the incentive for employees to return to work. This is a key component to the balance in the workers' compensation system whereby once an injured worker is healthy he can return to work. Providing a greater marginal benefit while collecting compensation during recovery is a disincentive to returning to work.
NFIB Position: NFIB opposes all legislation which will increase the costs of workers' compensation.
Issue Status: Pending before the Labor and Public Employees Committee.
What to Do: Contact your legislators. Tell them how many employees your business has and what workers' compensation costs your business annually.
What to Say:
- Tell them how many more employees you could put to work if workers' compensation costs were under control.
- According to the pricing by the National Council on Compensation Insurance Inc., the change in discretionary benefits would raise workers' compensation costs in Connecticut. This increase could be by as much as 10 percent.
- All projections point to an end to continued rate savings and some industries experiencing single and double-digit premium increases for the coming year. This softening economy, combined with rate increases, would be exacerbated in Connecticut with a move to unlimited discretionary benefits.
- Tell them how many employees you could not afford if the costs rise by 5 percent, 10 percent, 20 percent or 30 percent. Proposals could impact costs this year.
- We need to keep incentives in place for injured workers to return to work.
- We should not penalize other employees or put their jobs at risk in order to enhance benefits.
- Connecticut's workers' compensation benefits are already among the richest in the nation.