Senate, Assembly Committees To Hold Hearings on Workers’ Compensation Reform
The Senate Labor and Industrial Relations Committee this month will hold hearings on legislation to reduce employers' workers' compensation insurance premium rates, but Committee Chair Richard Alarcon (D-Van Nuys) said that legislation will not be completed by Gov. Arnold Schwarzenegger's (R) March 1 deadline, the Los Angeles Daily News reports (Sheppard, Los Angeles Daily News, 2/5). During his State of the State address last month, Schwarzenegger said he would seek to place a measure on the November statewide ballot if legislators do not pass reform legislation. As part of his "California Recovery Plan," Schwarzenegger in November proposed reducing by $11.3 billion the cost of the state's $29 billion workers' compensation program, under which employers pay $5.85 per $100 of payroll -- the highest rate in the nation -- for coverage. Schwarzenegger's plan includes measures that would prohibit workers from receiving multiple disability payments for the same injury; require dispute resolution more frequently to reduce litigation costs; limit penalties paid by insurers and employers in medical bill disputes; and establish uniform standards for permanent disability (California Healthline, 2/2). The committee will hold a meeting on permanent disability on Wednesday, and subsequent meetings on workers' compensation issues will be held throughout the month, the Daily News reports. However, Alarcon said that legislation would not be ready until March 31. "Just from a timing perspective, (March 1 is) impractical, particularly given the scope and complexity of workers' comp and the diversity of options available to us in terms of how to reduce costs," Alarcon said. He added that the March 31 deadline would allow the legislation to take effect in time for changes to be considered by the Workers' Compensation Insurance Ratings Bureau when it meets in July to recommend insurance premium rates to Insurance Commissioner John Garamendi (D).
Alarcon also said that he would seek to reinstitute state regulation of the workers' compensation insurance industry so that Garamendi's recommended premium rates to insurers would be mandatory. Schwarzenegger spokesperson Vince Sollitto said the governor is pleased that the Senate is taking action, but he is "holding firm on the March 1 deadline," the Daily News reports. "The clock is ticking," Sollitto said, adding, "And California needs meaningful workers' comp reform for the governor to sign by March 1. Otherwise the governor must prepare to let the people act where others could not" (Los Angeles Daily News, 2/5).
The Assembly Insurance Committee will meet Wednesday to vote on Schwarzenegger's proposal to reduce employers' workers' compensation insurance premium rates, the AP/Fresno Bee reports. However, Committee Chair Justin Vargas (D-San Diego) said that if the bill, which is being sponsored by Assembly member Abel Maldonado (R-Santa Maria), is not amended, "it's not going anywhere." Vargas added that workers' compensation reform "takes a lot more caution, a lot more study, a lot more prudence in my opinion. We shouldn't just rush into something." Schwarzenegger's proposal has "run into strong opposition" from labor unions, workers' lawyers and Democratic lawmakers, the AP/Bee reports. Sollitto said the committee's intention to vote on the bill is a "positive step" (Lawrence, AP/Fresno Bee, 2/6).
KPBS' "KPBS News" Thursday reported on Schwarzenegger's plans to reduce employers' workers' compensation insurance premiums. The segment includes comments from attorney David Dugan (Goldberg, "KPBS News," KPBS, 2/5). The complete transcript of the segment is available online. The complete segment is available online in RealPlayer.
Summaries of recent opinion pieces on efforts to reduce employers' workers' compensation insurance premiums are provided below.
- James Armitage, Sacramento Bee: The state workers' compensation system needs reforms that Schwarzenegger supports, especially those related to the litigation of permanent partial disability claims, Armitage, an insurance broker and former president of insurance broker association IBA West, writes in a Bee opinion piece. Armitage concludes, "Otherwise, the system that injured workers rely on and employers pay for could well collapse" (Armitage, Sacramento Bee, 2/6).
- J. Paul Leigh, Sacramento Bee: Overall increased health costs are among the factors that contributed to the 36% increase in workers' compensation insurance premiums in California from 1997 to 2001, Leigh, a professor in the Center for Health Services Research in Primary Care at the University of California-Davis Medical School, writes in a Bee opinion piece. "If California businesses would like more stable premiums, they should ask for the market to be re-regulated," Leigh states, adding, "They might even consider a single-payer, government-sponsored insurer" such as those that exist in states, including North Dakota, Ohio and other states(Leigh, Sacramento Bee, 2/6).
- Stanton Long, Sacramento Bee: Legislators should "completely abandon" the current state workers' compensation system and "replace it with one that addresses key cost drivers," Long, chair of Marsh's workers' compensation practice, writes in a Bee opinion piece. The definitions of compensation injury and occupational disease should be "tightly rewritten," medical visits per injury should be limited, "excess" disability awards should be eliminated and high legal and adjusting expenses should be reduced, Long writes (Long, Sacramento Bee, 2/6).
- Sen. Charles Poochigian (R-Fresno), Sacramento Bee: SB x43 -- the bill containing Schwarzenegger's workers' compensation reform package -- "would confront the highest priced system in America and bring costs in line with the national average" by requiring "use of objective medical findings based on nationally recognized medical ... standards," Poochigian, sponsor of the bill, writes in a Bee opinion piece. "It is our duty to pass a bold reform package that yields substantial cost savings for California employers, while ensuring that truly injured workers receive the care they need and deserve," Poochigian concludes (Poochigian, Sacramento Bee, 2/6).
- Julie Meier Wright, San Diego Union-Tribune: California's workers' compensation system is "complicated, costly, critically important, but eye-glazing to many except those who must write the checks," Meier Wright, a member of Schwarzenegger's Economic Recovery Council, writes in a Union-Tribune opinion piece. However, workers' compensation reform is "arguably the most urgent need of California business today" because "we all pay -- and pay -- and pay" for the costs of workers' compensation, Meier Wright states. The state workers' compensation system "is truly broken and, with the loss of numerous insurance carriers, rapidly heading toward being another state program with out-of-control costs," Meier Wright adds, concluding, "It should not take a costly ballot initiative to do what we elect our legislators to do" (Meier Wright, San Diego Union-Tribune, 2/6).