Workers’ comp reform on the way
Like the nature of injuries, many believe the effect of California’s workers’ compensation insurance overhaul will show over the long haul.
The new bill, SB 899, was signed by Gov. Arnold Schwarzenegger this week. It’s considered a compromise from the package sought by lobbyists for attorneys and business groups.
It was lauded by Assemblyman Tim Leslie, R-Tahoe City.
“In the last two years, not a week has gone by without someone writing or calling me asking for workers’ comp reform,” Leslie said in a statement.
In a nutshell, the law eases the pressure of increasing rates on commerce by requiring more accountability of the health care field and injured workers. In turn, rates are intended to go down.
California’s workers’ compensation costs have almost tripled from the $6.4 billion paid out six year ago. The average medical claim was $35,201 in 2002.
Incentives are plugged into the law for small businesses with under 50 employees.
Some people point to fraud as leading to rising costs in premiums amounting upward to 136 percent.
When Carina Evans saw her renewal notice this year, she was astounded by the 30 percent increase on covering a handful of staffers at her Bijou area restaurant.
“I just sat down and cried,” she said. The bill read $8,400 a year.
Many in the business community argue the high rates have driven companies out of the state.
“What we need to do is keep people from going across the state line (with their business),” said Duane Wallace, South Lake Tahoe Chamber of Commerce executive director. Here, the distance may amount to steps or miles away.
Wallace’s observation echoed the California Chamber of Commerce’s point of view.
“A deal was reached that will bring employers essential relief while ensuring that California’s severely injured workers receive the benefits they deserve,” said the bill’s author, Sen. Chuck Poochigian, R-Fresno.
Opinions on the reform package vary.
“I disagree that many employers are moving to California,” South Shore attorney Roger Murphy said.
Murphy’s concerned about the injured workers with legitimate claims getting the short end of the stick.
For example, the law only allows claims to cover 24 physical therapy visits.
Murphy said many injured workers, especially those with flair-ups, can quickly eat up those sessions.
“There’s a general belief there’s a lot of fraud. I just don’t see it,” he said.
Murphy said the law needs a guarantee that insurance companies will pass on the savings.
The impact has affected local governments as well.
El Dorado County experienced a 36 percent hike, while the city has endured a 26 percent rise in costs in South Lake Tahoe.
“We don’t know yet of the effects on the city, but it has to be better than what it was. It couldn’t get much worse,” City Manager Dave Jinkens said. “At the same time, everybody wants to see injured workers protected.”
He’s aware some city employees have pending claims.
“I know people here in the city who have had injuries for three years and are still going to physical therapy. I don’t think it’s good to put in an arbitrary number,” city employee Charlie Gibson said.
The engineering department employee injured himself two years ago using a slide-hammer, a pole that makes holes in the ground.