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Thursday, October 3, 2013

City's workers' comp costs skyrocketing

Posted By on Thu, Oct 3, 2013 at 5:30 PM

At this afternoon's New Orleans City Council's budget committee, assistant city CAOs Courtney Bagneris and Cary Grant said workers’ compensation costs are expected to rise to $24 million — well above their budgeted $16 million, along with another rise in claims. Costs in 2012 for workers comp were nearly $22 million. Grant said he can’t explain the massive hike and that an audit is in process.

Grant said before last year, workers’ compensation costs typically fell within budget. Bagneris called the leap “an alarming change” as the city faces another lean budget of $500 million (and must factor in the millions of dollars dedicated to the New Orleans Police Department consent decree).

The city budget funds for workers’ comp with a self-insured payment program, rather than buying insurance to pay workers’ comp. With the increase in claims made by city employees in 2012, even “low-risk” departments faced increased per-employee expenses — from $300 to $1,700. “High-risk” departments, like the New Orleans Fire Department (NOFD), are trying to make expense cuts where possible to avoid budgeting issues for workers’ comp, such as NOFD employees filing claims immediately with NOFD-approved network doctors.

Mayor Mitch Landrieu will present his 2014 budget later this month.

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