Businesses rally against court ruling analysts say could increase comp costs 265%

A recent Connecticut Supreme Court ruling could increase workers compensation claims costs by as much as 265%, according to an analysis made public by the Connecticut Business & Industry Association.

Hartford, Connecticut-based CBIA provided on Thursday a copy of an impact analysis report by the National Council on Compensation Insurance, providing details on a March 18 ruling in Gardner v. Dept. of Mental Health & Addiction Services, finding the outcome “will lead to upward pressure, potentially resulting in a significant increase” for employers.

In the ruling, the state’s highest court found that state law “clearly” empowers administrative law judges to award ongoing temporary disability benefits of up to 520 weeks to injured workers receiving workers compensation who have reached maximum medical improvement.

NCCI stated in its analysis that “the Gardner decision may also impact existing claims that are open or eligible for reopening” and therefore “an unfunded liability may exist due to the potential for retroactive implications related to additional costs for such claims that were not contemplated in the premiums charged for policies written prior to this court decision.”

“The Gardner decision will have a disastrous impact on all public and private sector employers,” Chris Davis, CBIA’s vice president of public policy, said in a statement issued Thursday.

“All employers face higher costs and the state and municipalities will need to dramatically boost their reserves for claims — potentially leading to tax hikes or cuts in other state programs,” he said. “The ruling will also impact overall workers compensation system costs and undermine decades of stability.”