Reforms Could Ease Pending Workers’ Comp Premium Hike
By SHERRI CRUZ
California’s workers’ compensation reform package likely will bring lower premiums for employers. How much is the question.
“There’s no question this is a positive development,” said Art Levine, a Fullerton attorney who specializes in workers’ comp issues. (See Executive Summary, page 15, for details about the reform package.)
Levine represents employers in insurance premium disputes. He also advises the public members of the Workers’ Compensation Insurance Rating Bureau’s governing committee. The bureau recommends rates for workers’ comp premiums.
A lot of politicking still was going on last week about how much the reforms would save. Whatever the savings, some of it stands to be passed on to employers, according to Levine.
The rating bureau still was tallying the savings late last week. A big part of it could go toward reserves at the California Guarantee Insurance Association, he said.
The association pays claims when insurers go belly up. In July, the rating bureau’s governing committee filed for a 12% increase in advisory premium rates effective on Jan. 1. While the rates are advisory, insurance companies usually use the numbers.
Next year’s increase could be lower with last week’s reforms, Levine said.
“Employers can feel good about that,” he said.
“It’s going to be good for employers,” predicted Ed Tierney, of Tierney Insurance Services in Orange, which sells workers’ comp and other insurance policies to employers.
One key aspect not addressed by the reform package, according to Tierney: a better way of determining if the injury was work related.
“I have claims where I know people didn’t get hurt at work,” he said.
While employers can fight claims, “a whole lot of people are needing to do a whole lot of work,” he said.
“They have to do a better job at figuring out what is a work-related injury and what isn’t,” he said.
Tierney sells insurance, mostly to manufacturers, through the State Compensation Insurance Fund. Some companies are paying $9 per $100 of payroll on workers’ comp insurance, he said.
To Tierney’s liking: the reform package’s medical fee schedule for treating injured workers and a cap on chiropractic visits at 24.
The vocational rehabilitation piece also was a good move, according to Tierney. Before, a worker who needed to get retrained would essentially get a $16,000 check.
Now they have to pick a college and get a voucher worth $4,000 to $10,000, depending on the amount of the worker’s disability.
“These cost savings will add up, and there will be rate relief,” Tierney said.
“If they didn’t curtail all those costs, we’d be dead in the water. Let’s just see if it’s enough.”
