New Study Adds Pressure To Rework California Workers’ Comp Benefits
Changes to California's workers' compensation insurance system have cut costs by about $4 billion more than originally expected, leading some labor advocates to lobby harder for legislation that would increase workers' comp benefits, the Sacramento Bee reports.
The Legislature in 2003 and 2004 approved reforms to California's workers' compensation system that were projected to reduce costs by about $10.1 billion, but a recent review of workers' comp claims by the industry-backed Workers' Compensation Insurance Rating Bureau found that costs fell by about $14.5 billion.
The increased savings come from several areas where cost reductions exceeded expectations, including:
- New formulas to determine permanent disability benefits that cut costs by about $2.2 billion, above projections of $1.4 billion;
- Caps on chiropractic visits that reduced costs by about $800 million, double the $400 million expectation; and
- Limits on physical therapy sessions that translated to $400 million in savings; analysts initially projected that the caps would cut costs by $300 million.
Advocates for injured workers are using the findings to heighten their lobbying efforts in favor of legislation before Gov. Arnold Schwarzenegger (R) that would increase workers' compensation benefits.
One such bill is SB 936 by Senate President Pro Tempore Don Perata (D-Oakland). Over three years, the measure would double workers' comp benefits for permanent disabilities.
The governor vetoed similar legislation last year, but Schwarzenegger spokesperson Sabrina Lockhart said that the governor has not taken a position on SB 936 (Chan, Sacramento Bee, 10/11).