Check out this article by the Workers’ Compensation Policy Institute. 

According to a study by The Workers’ Compensation Policy Institute, New York employers pay an added workers’ compensation surcharge nearly five times the average of that in other states.

• New York’s workers’ compensation surcharge is currently 20.2%, more than double of its nearest competitor Minnesota (8.9%).
• The average assessment is 4.2% for the 32 other states that impose this premium tax.
• The assessment has been steadily on the incline in New York, with increases of 10.4% in 2010 and 27% in 2011.
• Half of New York premium tax goes to support the state Special Disability Fund, the state's second injury fund.
• It is also used to fund the Reopened Claims Fund (a 5.7% assessment) and to run the State Workers’ Compensation Board (a 3.2% assessment).

Bad news for employers and bad news for brokers because brokers are making commissisons based on pure premium, not on assessments.  High assessments can only lead a broker to have to reduce premiums to stay competitive.   Thankfully a sophisticated broker in today’s market has the opportunity to offer his/her clients many value-added services, which makes the argument to not just look at upfront price, but rather the agency’s long-term value with long-term savings.  Agencies that can actually show their clients real savings for work that they’ve done for them will certainly maintain their clients.  If an employer only cares about price from a broker, I believe there will not be a long-term relationship because every year becomes an open season price-shopping bidding war.  It’s the extra programs that a broker offers their accounts that offer long-term loyalty to your brokerage.  Now just think when your clients think of you, do they think price or service?

You can read the full article here.