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Workers' Compensation

Overview

The California workers’ compensation system, created in 1913, constitutionally guarantees every worker the right to compensation for workplace injuries and all medical treatment required in order to "cure and relieve" the worker. In the late 1990s, California’s system of workers’ compensation insurance, which is in a state of constant reform and re-reform, began to experience massive cost increases. These increases were the result of overutilization of medical services, higher-than-normal indemnity benefit costs, and increased litigation. At the height of the workers’ compensation crisis in 2003, employers in the state were facing double-digit insurance premium increases, causing California to have the most expensive workers’ compensation premiums in the nation. Workers' Compensation

Goals

Promote legislative, judicial and regulatory actions that maintain an efficient workers' compensation system that provides adequate worker benefits while protecting the competitive position of California employers.

Major Victories

Supported workers’ compensation system reform that offsets necessary increases in permanent disability benefits and potentially lowers system costs for employers by reducing delays and litigation in the system, addressing the lien epidemic, shortening the medical-legal process, implementing an independent medical review system and streamlining the permanent disability schedule (SB 863).
Stopped costly workplace mandates, such as 2011 bills increasing workers’ compensation costs (AB 375, AB 1155); and a 2010 proposal eroding the cost-saving workers’ compensation reforms (SB 145).
Helping control workers’ compensation costs by backing 2011 proposals signed into law to lower pharmaceutical costs, lower frictional costs in the workers’ compensation system, streamline the process, establish a fee schedule for vocational experts and ensure contractors have coverage (AB 378, AB 335, AB 1426, AB 1168, AB 397).
In 2009, stopped one bill that would have increased workers’ compensation costs (AB 664), and stalled another that would have increased workers’ compensation costs significantly and made it more expensive to employ Californians by arbitrarily increasing permanent disability benefits (SB 773).
In 2008, protected workers' compensation cost savings by stopping a roll-back of reforms and the resulting doubling of permanent disability costs (SB 1717).
In 2007, protected workers’ compensation cost savings by stopping roll-back of reforms and doubling of permanent disability cost increases (SB 936), plus requirement for employers to provide an injured worker with a job voucher before knowing the amount of benefit due with no avenue to recoup costs (SB 942).
In 2007, resolved workers’ compensation temporary disability issues. Converted a former “job killer” proposal into a positive vehicle, negotiating amendments to resolve a problem in current law in a way that retains the cost savings in the 2004 reforms by maintaining the current 104-week cap on temporary disability benefits while allowing injured workers to receive those benefits within five years from the date of injury (AB 338)
Protected workers' compensation reforms in court. See CalChamber in Court.
In 2006, protected workers’ compensation reforms by securing a veto of legislation rolling back the reforms by arbitrarily doubling the permanent disability payments over three years without sound data with which to base the increase (SB 815).
Safeguarded the reforms that have led to a steady decline in workers’ compensation premiums by stopping legislation that would have negated those reforms, including a “job killer” bill that would have increased costs and uncertainty in the workers’ compensation system by allowing unqualified injured workers to select and pay for medical treatment outside the exclusive remedy workers compensation system — opening up the floodgates to abuse injured workers and create liability for employers.
Worked on numerous regulatory packages that implemented the reform proposals in the CalChamber-supported workers’ compensation reform legislative package. The regulations included the permanent disability rating schedule, medical provider networks, independent medical review, utilization review standards, audit penalties, utilization review penalties and repackaged drugs.
Stalled legislation that would have lifted caps on the number of treatment visits allowed for chiropractic and physical and occupational therapy, previously out-of-control and overused treatment and a significant cost driver.
Neutralized legislation that would have prohibited the administrative director of the Department of Workers' Compensation from setting a reasonable fee schedule for repackaged drugs, a major workers' compensation cost driver.

Position

Workers’ compensation costs for California employers must decrease to be more competitive with costs paid by employers in other states. California Chamber of Commerce-supported cost-saving reforms must be implemented expeditiously through the regulatory process in a manner consistent with the Legislature’s intent. These reforms also must be protected from any attempts to dilute or undercut savings through subsequent legislation or judicial activism. The ultimate goal is a balanced workers’ compensation system that both efficiently provides timely and fair benefits to injured workers, and minimizes administrative and frictional costs to employers.