By Laurence Darmiento
It’s been less than a year since Gov. Arnold Schwarzenegger’s workers’ compensation package was enacted. But already there are more reforms being proposed in cleanup legislation.
Midsize businesses stand to benefit.
Included in a trio of bills introduced this month by state Sen. Charles Poochigian, R-Fresno, is a proposal to make it easier for smaller companies to form group self-insurance plans to pay for treatment of injured workers.
Companies individually self-insured for workers’ compensation claims so far are seeing the greatest savings from last year’s reforms. The legislation would pass on similar benefits to smaller companies.
“Usually a small employer cannot qualify because of the qualifications,” said Betsey Brewer, co-owner of Rule Group, a Pasadena commercial insurance brokerage. “You have to be a really strong company to take this on.”
Currently, fewer than 20 workers’ compensation insurer groups exist statewide, largely because of stringent financial rules limiting the types of companies that can band together.
Senate Bill 178 would allow companies in similar but not necessarily identical lines of business to form the groups.
It also would relax some of the financial rules that require the groups not only to reserve for claims, but to set aside annual deposits, said John Norwood, a lobbyist for independent companies.
In exchange, the bill would tighten regulatory oversight of the groups, requiring additional auditing and reporting of their finances.
It is modeled after regulations already in place in New York and two other states.
Poochigian had an identical bill fail to make it out of the Legislature on the last day of the session. Norwood said he is optimistic it will past this time.
Laurence Darmiento is a staff writer with the Los Angeles Business Journal.
