THEY SAY
Workers’ Compensation,More Than Half a Loaf
Here are comments by two of the most pro-business and fiscally conservative state legislators about the new reform:
Sen. Tom McClintock, R-Thousand Oaks:
Many of us had hoped for comprehensive reforms. Instead, we have compromised reforms. But that’s the nature of the process and in this case the process worked pretty well.
I believe that this law significantly will reduce costs over time and that it will produce more just and rational outcomes from a system that has become notorious for its arbitrary decisions, endless administrative delays and excessive litigation.
It is not fair or right or rational for a system designed to treat industrial accidents to take no notice of prior medical conditions, prior injuries or injuries sustained off the job. This measure begins to address this inequity by allowing these issues finally to be addressed, at least on the determination of disability payments.
It is not fair or right or rational for a system designed to treat injuries to ignore any objective medical standards in assessing those injuries,or to require any clinical verification that the injury is even real. This measure begins to address this inequity by introducing objective medical standards as the guide,again, at least to the determination of disability payments.
I have many concerns with this bill. Because it doesn’t redress the awards that now are being paid under the old law, it will take some time for savings to be realized. Meanwhile, under the new law, California employers will see an immediate quintupling in surcharges to support administration of the existing program and the initiation of a new Return-to-Work program. That means $100 million of certain and immediate cost increases to businesses, while savings may be many months away.
I also am concerned with provisions that still potentially allow permanent disability awards of 700% of an individual’s earning capacity by claiming injuries to different parts of the body. It is a measure of the defectiveness of the current system that this is actually an improvement over the status quo.
Assemblyman John Campbell, R-Irvine:
Here’s what businesses can expect:
& #149; The bill takes effect immediately. It may even stop the filing of some claims because they will be less lucrative for lawyers and others now.
& #149; Premiums should begin to drop (if your loss ratios are not up) with your next renewal. Some estimates are that the bill should lower premiums by about 25%-30%. But it may take more than a year for all the reforms to have their full effect on the system.
& #149; It is expected that insurers who had left this market will come back, thereby giving you more choice and competition at renewal time.
& #149; The bill is 200 pages and very complicated. But it has lots of opportunities for businesses to better manage claims and reduce losses. You should get with your consultants right away. For example, employers can set up a pool of medical providers from which the injured worker can choose. Companies need to get those pools established to keep people out of the fraudulent workers’ comp “mills.”
& #149; If your company is self-insured, you should see savings immediately, or as soon as you implement some of the bill’s provisions.
& #149; Sixty percent of the market is controlled by the State Workers’ Compensation Insurance Fund, which the governor will expect to react quickly to improve rates and competition in the market.
& #149; There is more that the governor can and will do administratively to improve the fund and the appeals and court processes.
This is the best that could be achieved with Democrats in charge of the Legislature. If you want even more reform and more reductions, we need to elect more Republicans in November.
