If SB-847 approved:
Workers’ comp costs could increase by $152 million in first year of proposal

(May 4, 2007) Workers’ compensation costs in Connecticut could increase by a stunning $152 million in the first year alone if a measure promoted by the Labor Committee and trial bar is approved. The measure is currently before the Senate but is expected to be referred to the Appropriation Committee for a vote.

Not only does SB-847 drive up costs in the private sector, it also does that for the state and municipalities.

The bill will extend the maximum amount of discretionary benefit awards for partial permanent disabilities (PPD) to 520 weeks — expanding what is already an extraordinarily generous additional benefit.
Connecticut workers’ compensation benefits are among the most generous in the nation. But the state’s workers’ compensation commissioners are also allowed to award so-called “discretionary benefits” in addition to granting weekly wage replacement, permanent impairment awards and medical benefits.

According to the state’s Office of Fiscal Analysis, SB-847 will have a “significant” fiscal impact on the state and municipalities each year, and the National Council on Compensation Insurance predicts the bill could increase the costs of workers’ compensation insurance for Connecticut businesses by up to 13.2% or $152 million in the first year alone.

Meanwhile, Connecticut remains in the top 10 in the United States for highest workers’ compensation costs. It’s a cost that many businesses are finding harder to afford.

This week, businesses have been contacting legislators to urge them to reject such an unaffordable proposal. “Please keep in mind that you will affect small businesses who can least afford to meet new costs,” a CBIA member wrote to his local legislator. this week.

“We are facing higher costs across the board, and overseas pressures do not allow us to pass on these costs,” he continued. “SB-847 is projected to significantly increase our workers’ comp rates, impacting not only our bottom line, but our employees’ paychecks.”

What’s wrong with SB-847?
• Under current law, discretionary benefits are limited to the either the amount of a worker’s permanent partial disability (PPD) benefits or the statutory maximum of 520 weeks, whichever is less.
• The bill removes the obligation of a workers’ comp commissioner to choose the lesser of the two options, so that he/she can award up to the statutory maximum of 520 weeks worth of benefits, regardless of the amount of the PPD award.
• If discretionary benefits aren’t limited to the PPD amount, then almost any amount up to the statutory maximum is possible. When that happens, Connecticut businesses will pay a huge price for the unbridled discretion of the WC Commissioners.
• And under SB 847, even relatively minor injuries can be awarded the statutory maximum amount of 520 weeks of compensation.

Much has been said this year about how Connecticut needs to do all that it can to promote renewed job growth and a health economy. But legislation such as SB-847 only undermines such efforts and makes it harder for companies to do business in the state.

CBIA urges lawmakers to reject SB-847 as unwise and unaffordable for Connecticut. For more information, contact CBIA’s Kia Floyd at 860-244-1931 or floydk@cbia.com.

CBIA Action Center

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