California Looking for Comp Reform This Year

Advocates for business, labor and injured workers are wondering if 2001 will be\r\nthe year California sees increased benefits and long overdue reforms\r\nto its workers' compensation system.

Although it''s still early in the legislative process, advocates for business, labor and injured workers are wondering if 2001 will be the year California sees increased benefits and long overdue reforms to its workers'' compensation system.

Twice in the last two years, Gov. Gray Davis has vetoed legislation that would have increased comp benefits. Business and insurance representatives, however, say reforms are needed to offset benefit increases.

"Employers can''t afford an increase unless the system is more cost-effective," said Nicole Mahrt, public affairs director for the American Insurance Association (AIA). "Costs are out of control, even though the claims numbers are decreasing."

The current proposal, SB 71, requires the Senate Office of Research to conduct a study that would, among other things, determine the appropriate level of workers'' compensation benefits.

It would include a schedule for raising benefits and would also identify any potential efficiencies within the system.

AIA is proposing a repeal of the requirement that workers be offered vocational rehabilitation. Other reform proposals include:

  • Maintaining the permanent disability system fairer for workers and employers;
  • Curbing medical costs, by addressing the physician presumption, which gives more weight to the initial treating doctor;
  • Improving return-to-work programs;
  • Restoring efficiency to the system; and
  • Simplifying the delivery of benefits, as AIA says the California comp system is one of the most complex in the country.

"California''s current benefits are grossly inadequate," said the California Labor Federation (CLF) in a statement supporting SB 71. "For most permanently injured workers, the maximum weekly benefits has been frozen for 18 years. In fact, California''s benefits rank among the lowest in the nation.

CLF recommends that the state:

  • Increase the maximum weekly temporary disability benefit and index it to the state''s average weekly wage;
  • Assure prompt payment of benefits and early access to medical treatment;
  • Promote effective return-to-work programs; and
  • Enhance enforcement against uninsured employers and increase penalty assessments.

The state Commission on Health and Safety and Workers'' Compensation (HSWC) is also waiting to see what the legislature will proposes. The panel issued its final report and recommendations in January.

HSWC Executive Director Christine Baker said the most significant recommendations are:

  • Improving the information given to employees by their employers before and soon after their injuries;
  • Implementing an audit and enforcement procedure to streamline and make the system less burdensome; and
  • Reducing pharmaceutical costs in workers'' comp, which are about 40 percent higher than for other nonworkers'' comp areas.

by Melissa Martin

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