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California legislators ushered in a measure to raise workers’ compensation benefits for injured workers through both houses Feb. 4. The bill now awaits signature by Gov. Gray Davis according to the American Insurance Association (AIA).
The bill, AB 749, sponsored by Assembly Insurance Committee Chairman Tom Calderon (D-Montebello), will raise benefit costs for employers by $3.5 billion once it is fully phased in over four years. The legislation raises benefits for both temporary and permanently injured workers, and will index benefits to increases in the state average weekly wage starting in 2006.
“AIA agrees that injured workers need an increase in benefits,” said Mark Webb, vice president for state affairs. “However, while the reforms offered in AB 749 may offset some of these increases over time, the negative impact of the benefit increases will be felt immediately by California’s cash-strapped public and private sectors.”
According to the AIA, AB 749 does contain important reform measurers that will give employers extended control over medical treatment and partially repeal the treating physician’s presumption, which is viewed as a major cost driver in the system.
“This bill has been on a fast-track since negotiations resumed in January,” commented Webb.