2012 Could Be a Workers’ Comp Reform Year

Posted on: February 21st, 2012 by Leaders' Choice Staff No Comments

2012 Could Be a Workers’ Comp Reform YearAs the new year starts rolling, state legislators have been busy introducing workers’ comp legislation, and reports from the Capitol are that this could be the year for employers and labor to work together on a measure that would increase payments to injured workers and include offsetting cost reductions.

According to lobbyists and other Sacramento insiders, legislators are likely to heed the advice Governor Jerry Brown gave in a veto message last year of a bill that would have doubled the amount of time some workers would be eligible to receive temporary disability workers’ comp benefits.

In his veto message for AB 947, Brown said he recognized the need to improve injured worker benefits, but cautioned against “piecemeal changes” that failed to tackle system costs. “Workers’ compensation reforms, however, need to be addressed on a broad and balanced scale – ensuring workers receive adequate and timely benefits and treatment, while also ensuring that the costs of the system are sustainable,” Brown said at the time.

According to the Workers’ Comp Executive trade publication, the employer and labor communities seem ready to work together on crafting legislation that would both address the widely acknowledged inadequate permanent disability (PD) indemnity benefits injured workers receive (which would be in the form of a benefit increase) and how to offset any increases with cost savings.

The concern about inadequate PD benefits is growing, and it seems to be validated by a study conducted by the UC Berkeley Survey Research Center on behalf of the Commission on Health and Safety and Workers’ Compensation.

Since changes were made to the Permanent Disability Rating Schedule in 2005 as mandated by the 2004 landmark legislation SB 899, aggregate PD payouts to injured workers have fallen by 58%.

The study authors suggested that to restore PD payouts to pre-2005 levels, they would have to be increased system-wide by $2.64 billion.

Angie Wei, legislative director for the California Labor Federation, told Workers’ Comp
Executive: “We have, as you know, been committed to fixing the PD schedule, and are wanting and willing to find some concomitant savings to do so. This year seems ripe for this effort, and we are assessing all of our possibilities now in the New Year.”

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