Our San Francisco insurance attorneys were interested to see news that another round of legal reforms of California’s workers’ compensation system is ongoing. The California Assembly and Senate had a joint hearing on this issue earlier this year, entitled, “Informational Hearing, Injured Workers Since SB 899: A Discussion on the Impacts of SB 899 on Permanent Disability Benefits.”
Governor Arnold Schwarzenegger signed into law a previous reform bill in 2004 that changed or affected almost every facet of California workers’ comp law. But the reformed system has turned into a boondoggle that has almost everyone united in favor of new reforms to fix the growing problems, many stemming from the last reform effort. One speaker noted that workers’ comp medical treatment costs have gone up 10 percent every year since the last reform. Others noted that injured workers are receiving 60 percent less benefits today than in the pre-reform era. The system is benefiting none and making no one happy. Current Governor Jerry Brown has signed into law a few workers’ comp related bills, but he also advocates for a more comprehensive reform, saying it should be on a “broad and balanced scale.”
This comprehensive reform will have two main tricky issues to contend with: (1) better managing permanent disability benefits (which have been drastically cut in recent years), and (2) an attempt to stop premium rates increasing.
California Insurance Commissioner Dave Jones also testified at this joint hearing. He noted that the state option (meant to be used as a last resort), the State Compensation Insurance Fund, was at one point more than 50 percent of the market. He testified that there were indications that workers’ comp insurers were operating on an ever-increasing loss. He stated that there were many cost saving options, but that the Department of Insurance was not the appropriate organ to introduce them.
Marty Morgenstern, secretary of the California Labor and Workforce Development Agency, noted that “We think there is money within the system that can be utilized. We need the medical and legal practitioners, the insurers, the employees in their organizations, all working together in a cooperative way to fix this system. And that’s what’s going to do it.”
This is becoming a wider problem as some businesses are leaving California because of this broken system. For example, Grimmway Farms, one of the world’s largest carrot producers, is expanding production in other states with less problematic workers’ comp systems, such as Washington, Florida, and Georgia.
And the saddest part of the whole mess is that workers are suffering and being neglected. Brian Chalk, president of the California Applicants’ Attorneys Association, said, “The California constitution says that the people are supposed to have benefits, and they’re supposed to be adequate benefits. The focus that this has taken is all about the insurance company.”
Worker’s Compensation system, like insurance programs generally, are meant to ensure that those hurt receive proper support at the time they need it. Unfortunately, community members are often forced to engage in prolonged battles with these big interests to get the support that they need. This is never acceptable. It is important for local residents to remember that legal professionals can help them receive the compensation to which they are entitled. If you have been denied benefits that you deserve, contact an Oakland insurance attorney as soon as possible.
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