Lawmakers Greenlight Workers’ Comp Overhaul

September 1, 2012

The state Legislature approved a reform bill for California’s $17-billion workers’ compensation insurance system, one that promises to hike benefits for injured workers and cut costs for employers, the L.A. Times is reporting.

SB863 will increase benefits for injured workers by nearly $750 million a year, and reduce workers’ comp premiums for employers, according to its wording.

The Assembly approved the bill 66 to 4 and the Senate followed with a 34-4 vote, only three days after the measure had its first legislative hearing.

Several amendments were made to the bill earlier in the day. The changes were sought by some business groups concerned about escalating insurance costs and labor unions that have been working for years to regain benefits that were eroded in a 2004 overhaul of the system.

The bill would change the way benefits are calculated for injured workers and eliminate coverage for conditions that most commonly lead to lawsuits, including insomnia and mental health problems. Assemblyman Jose Solorio, D-Santa Ana, said the bill would lead to a more functional system for all parties.

“It’s an all-out assault on waste, fraud and abuse,” he said. “It provides consistency and certainty in the system.”

On Friday morning, Gov. Jerry Brown took the rare step of urging lawmakers to approve the bill.

He said the legislation was needed to “avert an imminent crisis where workers suffer and rates will skyrocket.”

Supporters say the legislation could reduce rates by as much as 7 percent by slowing the upward climb of medical and legal costs.

The bill addresses changes pushed in 2004 by then-Gov. Arnold Schwarzenegger that dramatically reduced benefits for permanently injured workers.

Labor and business advocates, as well as lobbyists for lawyers, insurers and physicians, worked feverishly in the final days of this year’s session to strike a deal. Supporters include the California Chamber of Commerce and the California Labor Federation.

Several lawmakers said they did not know exactly what the bill contained.

Assemblyman Roger Dickinson, D-Sacramento, acknowledged concerns about how the reforms would affect workers and officials who process claims but said that the good the bill did outweighed the possible harm. He added that the Legislature would likely revisit the issue with more fix-it bills in the coming years.

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