Injured Workers, Lawyers File Suit To Block State Workers’ Compensation Regulations

Injured workers on Wednesday filed a lawsuit against the Division of Workers' Compensation that seeks an injunction to block the implementation of new state workers' compensation regulations, the Los Angeles Times reports. According to the lawsuit, the proposed regulations would reduce permanent disability benefits by more than half, a "much greater amount than lawmakers intended," the Los Angeles Times reports (Lifsher, Los Angeles Times, 1/20).

The administration of Gov. Arnold Schwarzenegger (R) on Dec. 23, 2004, issued the regulations to revise the guidelines used to determine workers' compensation insurance payments for permanently injured workers on Jan. 1. Division of Workers' Compensation Director Andrea Hoch submitted the regulations to the Office of Administrative Law for consideration.

The regulations are part of the workers' compensation reform law (SB 899) enacted last year. A section of the law requires more objective guidelines to determine workers' compensation insurance payments.

The regulations would base workers' compensation insurance payments on guidelines developed by the American Medical Association to determine the extent of injuries. Classifications will include such factors as age, job and "diminished future earning capacity." Injured workers could appeal the amount of their workers' compensation insurance payments in court (California Healthline, 1/3).

Rick Rice, assistant secretary of the California Workplace and Development Agency, called the lawsuit "a desperate act" to delay the implementation of workers' compensation reform at a time when insurance premiums have begun to decrease (Los Angeles Times, 1/20).

Sen. Charles Poochigian (R-Fresno) said that attorneys who represent injured workers have led protests of the proposed regulations. "Nothing that was done was intended nor has the effect of harming truly injured workers," he said (Abate, San Francisco Chronicle, 1/20).

Injured workers on Wednesday also led protests at 19 government offices throughout the state. At the largest protest in Los Angeles, about 400 city residents rallied in front of a courthouse that hears workers' compensation lawsuits. At a protest in Santa Ana, Mark Hayes, president of VotersInjuredatWork.org, said that the organization "will fight to win back the right to choose our doctor, restore our benefits and punish fraud by insurance companies" (Los Angeles Times, 1/20).

State workers' compensation costs have increased by 28% at the same time that costs in the private sector have decreased by almost 15%, which "clearly is a problem that the state must address," according to a Contra Costa Times editorial. The editorial concludes, "A thorough investigation of the State Fund and the state's workers' comp system is needed as quickly as possible to assure taxpayers that their money is not being squandered by inefficiencies in a program that should by now be showing considerable savings" (Contra Costa Times, 1/19).