Governor Acts to Protect Workers’ Compensation System
(October 11, 2011) The Governor’s actions on eight workers’ compensation bills will preserve or allow cost savings for California businesses.
The California Chamber of Commerce believes that workers’ compensation costs must continue to decrease to ensure that California remains economically competitive. CalChamber-supported reforms that delivered significant cost savings must be protected. With recent activity that already has begun to increase costs and other such actions on the horizon, employers and policy makers should work to offset these increases with additional changes to the system.
Governor Edmund G. Brown Jr. signed five CalChamber-supported bills:
- AB 335 (Solorio; D- Anaheim) Lowers Frictional Costs in Worker’ Compensation — Brings an estimated savings of $42 million to the workers’ compensation system by requiring the workers’ compensation administrative director (AD) to work with the Commission on Health and Safety and Workers’ Compensation (CHSWC) to develop regulations regarding notices to injured workers; requires AD and CHSWC to develop and make accessible a booklet written in plain language about the workers’ comp claims process; streamlines and simplifies other notices to employees.
- AB 378 (Solorio; D-Anaheim) Lowers Pharmaceutical Costs — Lowers workers’ compensation costs by establishing guidelines for dispensing compound drugs, the circumstances under which those drugs would be covered and the reimbursement amount, and removes the incentives for physicians to refer patients to pharmacies in which the physician or physician's family has a financial interest.
- AB 397 (Monning; D- Carmel) Ensures Contractors Have Coverage — Seeks to address the underground economy problem by singling out contractors that do not have workers’ compensation coverage but requiring contractors that are exempt from having coverage at the time they are licensed to certify they are still exempt or have gotten coverage at the time of their license renewal.
- AB 1168 (Pan; D-Natomas) Contains Workers' Compensation Costs — Lowers costs for employers and insurers by establishing a fee schedule for vocational experts' services.
- AB 1426 (Solorio; D-Anaheim) Streamlines Workers’ Comp System — Streamlines the workers’ comp process and eliminates duplicative bureaucracy and inconsistency by eliminating the court administrator position.
Governor Brown vetoed three CalChamber-opposed bills that would have upset the balanced system that provides fair benefits to injured workers at a low cost to employers, while minimizing friction in the system.
- AB 211 (Cedillo; D-Los Angeles) Increased Workers’ Comp Costs — Increases costs in the workers’ comp system by establishing a flat $6,000 supplemental job displacement voucher to cover retraining and skills enhancement for injured workers without clarifying the timeframe when the injured worker can start receiving the voucher. In the Governor’s veto message, he explained that he was “reluctant to enact piecemeal changes to the workers’ compensation system in the absence of more comprehensive reform that addresses both the cost and benefits under the system.”
- AB 584 (Fong; D-Cupertino) Delays Workers' Compensation Cases — Causes delays in utilization review (UR) and increases costs by unnecessarily requiring UR physicians to be licensed in California. The Governor said he vetoed this bill because he was “not convinced that establishing a separate standard for workers compensation utilization review makes sense.”
- AB 947 (Solorio; D-Anaheim) Extension of Temporary Disability (TD) Benefit — Increases costs to employers by broadening the definition of the types of injuries that qualify for an extended timeframe to receive TD benefits, from 104 weeks to 240 weeks. “It is vital that injured workers receive adequate compensation to provide for their needs when they are unable to work due to work-related injuries,” Governor Brown wrote in his veto message. “Workers' compensation reforms, however, need to be addressed on a broad and balanced scale — ensuring workers receive adequate and timely benefits and treatment, while also ensuring that the costs of the system are sustainable.”
Staff Contact: Marc Burgat