Workers’ Comp Bill Amended, Brown Pleads for Support

By | August 31, 2012

As Legislators rushed to amend and pass a bill that would reform California’s workers’ compensation system before the Friday’s midnight deadline, several late amendments were made that may give the bill a fighting chance.

And Gov. Jerry Brown personally urged action on the legislation, which he said will boost benefits for injured workers and keep costs down for empolyers.

“For months, people whom I trust have held public hearings and worked with labor and management to reform a broken system,” Brown said in a statement. “They have crafted an extraordinary bill that will avert an imminent crisis where workers suffer and rates will skyrocket. That happened in 2004, but this time, we have the chance to fix a problem before it becomes a crisis. We have the chance to make the Workers’ Compensation System better–much better–for workers and cheaper for business.”

Brown had a number of meetings throughout the morning with a variety of stakeholders, including insurers.

Mark Sektnan, president of the Association of California Insurance Companies, said the bill makes several large promises he’s not sure can be kept, and he relayed that to Brown.

“We told him we’re not going to oppose the bill, but we’re not likely to support it either,” Sektnan said.

The bill calls for nearly $750 million in increased benefits for injured workers, and that’s offset by nearly $750 million in premium savings.

“We don’t think there’s enough cost savings in the bill to justify that,” Sektnan said.

One of the big amendments was to remove a provision in bill that increased benefits for injured workers who didn’t go back by 15 percent. In its place now is a $120 million fund for a return to work program.

Another amendment improves the efficiency of administrative medical provider networks, and another takes benefit payments from 80 percent of Medicare to 100 percent of Medicare.

Senate Bill 863 appears to erase a deficit the earlier proposal left the state’s system with, but it’s far from the $1.4 billion in system wide savings that had been called for at the beginning of the process as early as October.

Vehemently against the bill, as well as earlier proposals, is the California Applicants’ Attorneys Association, which is seeking more benefits for injured workers. A CAAA spokesman did not respond for comment.

DeLeon in a statement called into question the group’s opposition to his bill.

“Injured workers protesting SB 863 are clearly being misled,” he stated. “Why would you object to $740 million more being put back toward injured workers’ benefits, quicker payout and higher quality care?” said Senator Kevin De León. “It is clear that the profiteers behind the existing system have orchestrated this in order to hold on to a broken system that benefits them at the injured workers’ expense.”

The California Labor Federation issued a statement from Executive Secretary-Treasurer Art Pulaski on the bill.

“Finally, there’s a solution to the growing workers’ compensation crisis – a bill that provides a system-wide benefit increase of $860 million for injured workers, while reducing delays and friction that waste time and money,” the statement read. It’s not clear how the group arrived at its figures.”SB 863 is a landmark proposal that achieves a true rarity in Sacramento. It finds a way to increase benefits while reducing costs. After months of negotiations between labor and management, and a statewide listening tour hosted by the Department of Industrial Relations, a comprehensive reform deal was struck that benefits both workers and employers.”

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