Effective Jan. 1, Workers Comp For Mental Health Available To NY Workers

New York Governor Kathy Hochul has signed legislation to expand workers compensation benefits to people who are facing job-related mental health crises.

The new law, which goes into effect January 1, 2025, allows any worker to file for workers compensation for specific types of mental injury premised on extraordinary work-related stress. This expands coverage to all workers in New York. A law enacted in 2017 made only first responders facing post-traumatic stress disorder (PTSD) eligible for such benefits.

The new law by its own language expands coverage to cover all workers to “ensure that work-related PTSD is properly identified and treated as part of the workers compensation system.

The Workers’ Compensation Board may not disallow the claim by finding that the stress was not greater than that which usually occurs in the normal work environment.

“Not all injuries are physical, but all workers should get support for injuries sustained on the job,” said State Senator Jessica Ramos, a sponsor of the bill.

“Workers compensation is here for workers who have been injured or made ill on the job, whether their injury is one you can see or not,” said New York State Workers’ Compensation Board Chair Clarissa M. Rodriguez.

While labor endorsed the measure, businesses including insurance lobbyists opposed it.

New York State AFL-CIO President Mario Cilento applauded Hochul for signing the bill. “This law removes significant hurdles workers face when accessing care and benefits for workplace mental health claims,” Cilento said.

Cost Concerns

In opposing the measure, employer and insurance groups cited in part the uncertainty over the cost of the added benefit. Hochul had cited the unknown cost as a reason for vetoing the same bill last year.

The New York Insurance Association (NYSIA) warned that the new law will “dramatically expand the class of employees who can file this type of claim, from simply police officers, firefighters, and EMTs, who have an extremely high stressed, public service profession, to now all employees, regardless of their type of work performed.”

Insurers said the law will also “transfer the burden of proof for such claims onto the employer, thereby allowing work-related stress claims to be upheld, upon subjective allegations alone.”

NYSIA expressed concern that the term “extraordinary work stress” is left undefined, suggesting that it would be “very difficult to actually determine what ‘stress’ is actually uniquely attributable to work, as compared to stress that is intertwined with the vagaries and vicissitudes of life, and intrinsically a part of the human condition.”

The Business Council of New York State (BCNYS) similarly objected to the law because determining what qualifies as “extraordinary” will be up to workers’ compensation law judges and will result in extensive litigation.

“We believe that in addition to increasing the cost of litigation, this bill would transfer the cost of treatment and disability for psychological conditions that are now not considered work-related to the workers’ compensation system. Given the fact that close to half of all Americans in surveys complain of stress, the cost could be substantial,” NYSIA added.

While many states allow for workers’ compensation for mental health conditions, states differ in their definitions and eligibility. First responders generally have more access to benefits for mental health than others. The industry’s National Council on Compensation Insurance (NCCI) monitored 52 bills addressing workers’ compensation for workplace-related mental injuries. Several states considered bills to expand coverage for mental injuries to additional workers including Vermont that enacted a bill expanding PTSD coverage to include certain state employees.

Connecticut Law

This past January, Connecticut expanded its workers compensation law regarding mental health. Prior to January 1, only first responders in Connecticut were eligible for benefits for work-related PTSD. Under the new law (SB913), all employees subject to the workers compensation law are eligible if the qualifying injury is work-related and if a mental health professional diagnoses PTSD as a direct result of an event that occurs in their course of employment in which they:

View a deceased minor.
Witness someone’s death or an incident involving someone’s death.
Witness an injury to someone who then dies before or upon admission to a hospital as a result of the injury and not any other intervening cause.
Witness a traumatic physical injury that results in the loss of a vital body part or a vital body function that permanently disfigures the victim.
Carry, or have physical contact with and treat, an injured person who then dies before or upon admission to a hospital as a result of the injury and not any other intervening cause.

As with eligibility for first responders, the qualifying event must be a substantial factor in causing the injury and injury must not have resulted from a disciplinary action, work evaluation, job transfer, layoff, demotion, promotion, termination, retirement, or similar action.

NCCI has researched worker injury claims that include a mental health diagnosis. Among other findings, NCCI reported that the cost of these claims is driven by medical conditions and that injured workers with high-severity injuries are more likely to be diagnosed with mental disorders.

Workers compensation costs in New York and other states have been going down. Loss costs on which insurers base rates were reduced in New York by 9.0 percent in October, which was the eighth consecutive year with a decrease. According to the New York Compensation Insurance Rating Board, the cumulative change over the last 20 years (2005 to 2024) is -32.7 percent. The 2024 loss cost level is about 12 percent below the 2008 loss cost level, when rates were converted to loss costs.

This article was previously published by Insurance Journal. Reporter Andrew Simpson, a freelance writer and editor, was previously the Chief Content Officer for Wells Media Group.