Brown to sign Calif. workers' compensation fixes

Governor to sign bill boosting workers' comp benefits, reducing costs for Calif. businesses

Associated Press

SACRAMENTO, Calif. (AP) -- Gov. Jerry Brown will authorize extensive changes to California's $16.2 billion workers' compensation insurance system when he is expected to sign a bill Tuesday aimed at increasing benefits to people injured on the job while taming rising insurance costs for businesses.

Supporters say the measure will increase benefits to permanently disabled workers by $860 million a year while giving employers a break on insurance costs, which had been expected to rise by at least 18 percent in January. Opponents, including some chiropractors and attorneys for injured workers, say the bill is flawed and could reduce benefits for people who are unable to return to work.

Democratic Sen. Kevin De Leon of Los Angeles carried the bill, SB863, and lawmakers approved it with bipartisan support last month.

The changes were the result of months-long negotiations between business groups concerned about escalating insurance costs and labor unions that wanted to address unexpected benefit reductions for injured workers that followed changes pushed in 2004 by then-Gov. Arnold Schwarzenegger.

Brown's office said he will sign the bill Tuesday and promote the changes during events at a printing shop in San Diego and a Walt Disney Co. studio lot in Burbank.

"These significant reforms save hundreds of millions of dollars for California's employers while preventing an imminent crisis of skyrocketing rates that would have hurt both injured workers and businesses," Brown said in a statement in advance of the signing ceremony.

The legislation makes substantial reforms to the century-old system in which businesses buy insurance or self-insure to provide medical care and compensation to workers who injure themselves or fall ill on the job.

It changes how benefits are calculated for injured workers, creates a binding arbitration process to resolve coverage disputes and eliminates coverage for conditions that most commonly lead to lawsuits, including insomnia and mental health problems.

The measure also aims to prevent lawsuits by establishing a binding independent review system to resolve medical disputes and shortens the timeline for approval of treatment to three months. Under current law, workers can have up to two years to get approval.

In addition to increasing compensation for disabled workers by $740 million a year, which will boost benefits by an average of 29 percent for individual disabled workers, lawmakers included $120 million a year in a special fund for victims of catastrophic accidents who cannot return to work.

"SB863 is a landmark proposal that achieves a true rarity in Sacramento. It finds a way to increase benefits while reducing costs," said Art Pulaski, executive secretary-treasurer of the California Labor Federation, which represents more than 2 million members.

Supporters said that without the changes in the bill, employers would face insurance premium hikes that could trigger layoffs at a time when the state's unemployment rate remains above 10 percent.

Insurance companies say the savings will allow them to reverse a scheduled 18 percent premium hike, although the new rate has not yet been set.

The package was largely put together during nine months of discussions among a small group of labor unions and large employers, including Safeway Inc., Walt Disney Co. and Grimmway Farms, the state's largest organic grower.

Opponents say the bill actually hurts those who are most seriously injured by reducing some benefits and limiting care.

"In particular, the legislation restricts the ability of an injured worker to access necessary medical treatment and to receive adequate compensation if a worker is permanently disabled and cannot return to work at the same salary," Brad Chalk, president of the 700-member California Applicants' Attorneys Association, wrote in a letter to lawmakers.

The reforms also would limit the role chiropractors play in treating disabled workers. Under the bill, chiropractors would not be able to serve as a worker's primary care doctor after hitting a cap of 24 visits a year.

Kassie Donoghue, a chiropractor and director of government affairs for the California Chiropractic Association, said the cap is arbitrary and doesn't make sense because much of the cost increases are driven by prescription drugs and medical treatments. The association hopes to get that changed in further legislation.

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