FOR IMMEDIATE RELEASE
February 14, 2006
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Sen. Armstrong: Workers' Compensation Savings a Result of Republican-Led Initiatives 10 Years Ago

PA Businesses Continue to Benefit Thanks to Reforms Under Act 57 of 1996

HARRISBURG -- History-making reforms to Pennsylvania's workers' compensation system 10 years ago are continuing to reduce premiums for businesses in the Commonwealth, saving them money, benefiting workers, and helping the state economy, according to Sen. Gibson Armstrong (R-13). 

Armstrong noted that Act 57, a Republican-led initiative enacted in 1996, has allowed employers to regain control over the rising costs of medical expenses and lost wages associated with workplace injuries.  Governor Rendell's February 13 announcement that Pennsylvania businesses will save $100 million in the next year thanks to a 8.5 percent reduction in workers' compensation premiums is a direct result of Act 57 and other reforms that were a high priority of Senate Republicans, Armstrong said. 

"We took significant steps 10 years ago to reform our workers' compensation system and bring down the skyrocketing premiums that were strangling many businesses," Armstrong explained.  "Pennsylvania was at a disadvantage with other states, but with the enactment of Act 57 under the Ridge Administration, we reversed the runaway costs of workers' comp, made the system fair and competitive, and as a result we're keeping more jobs here in the Commonwealth." 

Act 57 and subsequent improvements sponsored by Senate Republicans accomplished the following:

• the timely return to the workforce of those capable of working;
• paying benefits only to legitimately injured workers;
• ensuring that benefit payments are commensurate with pre-injury earnings, so workers do not earn more while receiving benefits than they did on the job;
• reducing costs associated with litigation and claims administration; and
• guaranteeing that reform savings will be passed directly to employers who pay the premium and benefit expenses.

In addition, the measure created the safety committees that the governor touted in his announcement, Armstrong said.  "The safety committees were part of Act 57, which mandated a 5 percent reduction for any business that put one in place.  The plan was to stop after a certain number of years, but Senate Republicans were so supportive of the safety committees that when the provision was scheduled to sunset, the Republican Caucus extended it in perpetuity."

Armstrong added that the 8.5 percent drop in rates, scheduled to begin in April, reflect an improved record of workplace safety in the state, due in large part to the safety committees that were created under Act 57.

"Overall, the premium reduction is result of those committees, the reforms passed in 1996, and by an improving economy," Armstrong said.  "For 10 years, our legislation has been ensuring that the system continues to protect workers who are injured, but without burdening companies so much that they have to cut jobs.  The end result has been lower premiums, a more competitive job climate and more opportunities for Pennsylvania's workers."