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June 25, 2009
Corona Chamber
Fights Proposed Increases in Workers Compensation Rates
The
Corona Chamber continues to fight against repealing any of the
reforms from 2004 which have allowed the workers compensation
system to remain equitable and keep the cost of doing business
in California under control. As California’s workers’
compensation system continues its historic transformation, the
Chamber urges employers to remain vigilant in the legislative,
regulatory and legal arenas to protect the hard-fought reforms
of 2004.
The Workers’ Compensation Insurance Rating Bureau (WCIRB) is
recommending a 24% increase in the benchmark rate for workers’
compensation insurance policies. Cynthia Schneider, Chairperson
of the Corona Chamber of Commerce Legislative Action Committee
reinforces that, “Businesses have fought long and hard for the
reforms of 2004 and we need to continue to stave off any major
increase that will negatively impact the business community
negatively.”
Bobby Spiegel, Chamber CEO adds, “It has always been a priority
of this Chamber to fight against unreasonable rate increases and
seek solutions to improving California’s workers; compensation
system.”
The WCIRB recommended increase is for policies starting or
renewing after July 1, 2009. The WCIRB based its recommendation
on two components: increasing costs for medical treatment and
anticipated cost increases stemming from recent court rulings by
a judicial review panel known as the Workers' Compensation
Appeals Board. In the mean time, The Insurance Commissioner has
announced he will call a hearing to determine the causes of the
rapidly increasing medical treatment costs.
The WCIRB’s rate recommendation is only the beginning of the
ratemaking process. The Insurance Commissioner will take the
WCIRB's recommendation under advisement and issue his own
recommended benchmark rate to insurers. The Chamber will
continue to urge the Insurance Commissioner to hold steadfast in
the reforms of 2004 and take into account the slumping economy
and the overall cost affect of worker’s compensation insurance
rate increases on the Corona business community.
The Chamber will also continue its partnership with the Workers’
Compensation Action Network to ensure any future changes to
workers’ compensation promote the reform goals of increased
efficiency, less litigation and better outcomes for injured
workers.
March 13, 2008
Corona Chamber Continues Effort
to Protect Workers Compensation Reforms
As California’s workers’ compensation system continues its
historic transformation, employers need to remain vigilant in
the legislative, regulatory and legal arenas to protect
hard-fought reforms and ensure any future changes promote the
reform goals of increased efficiency, less litigation and better
outcomes for injured workers. The Corona Chamber has continued
to fight against repealing any of the reforms that have allowed
the workers compensation system to what it is today.
After promulgating the roughly two dozen regulations required
under
Senate Bill 899 and previous reform legislation, the
Division of Workers’ Compensation (DWC) will be revisiting
aspects of the system and proposing regulatory changes in 2008.
The DWC has announced that this year will bring changes to the
Medical Treatment Utilization Schedule, including the addition
of evidence-based treatment guidelines to more fully address
some injuries. The DWC will also make changes to regulations
affecting physicians who write medical reports and the ethical
standards for workers’ compensation judges.
“The Chamber continues to support the efforts of The Workers'
Compensation Action Network and looks forward to helping the
Network with the potential challenges they may face in 2008,”
stated Bobby Spiegel, President/CEO of the Corona Chamber of
Commerce.
More significantly, the DWC has announced it will use its
preliminary analysis of wage loss to adjust the Permanent
Disability (PD) schedule. Its plans reportedly include changing
the current modifiers for age and Diminished Future Earning
Capacity as a means of compensating different types of injuries
more equitably. Although the DWC has cautioned that a full “wage
loss” study under the new PD schedule won’t be available until
2009 — and that wage loss is being influenced by improved
return-to-work and higher temporary disability rates — it
believes the data support some early changes.
With the anticipated regulatory process on PD, it is uncertain
whether a third legislative attempt will be made in 2008 to
arbitrarily increase benefits. Previous attempts in 2006 and
2007 to double PD benefits were vetoed by Governor
Schwarzenegger. While it is early in the legislative session,
proposals to roll back certain reform elements are already
beginning to surface.
As California’s track record on workers’ compensation reforms
shows, the greatest threat may be in the courts. Applicants’
attorneys have mounted legal challenges to virtually every
aspect of the reforms in an attempt to turn back the clock to
California’s old, dysfunctional system. While certain issues,
such as the formula for calculating an employers’ liability for
PD when there has been a previous PD award, have been
adjudicated consistent with the intent of reforms, other
challenges seek to:
- Repeal the 104-week limit on temporary disability payments or
find new exceptions to the rule not provided for in SB 899;
- Overturn the new
AMA-based Permanent Disability Rating System by calling in
outside consultants to determine future earnings;
- Prevent the
application of apportionment reforms to certain preexisting
medical conditions that contribute to permanent disability; and
- Remove caps on
chiropractic treatment and other physical medicine.
Employers will face these challenges on multiple fronts in 2008,
which will be supported by “horror stories” put forth by
applicants’ attorneys. But with average insurance rates down by
61 percent, improved return-to-work outcomes and the vast
majority of injured workers reporting access to and satisfaction
with medical treatment, employers should feel confident that the
system is on the right track.
Nearly four years after the passage of SB 899, it is more-clear
than ever that reforming California’s workers’ compensation
system is an ongoing process. Long-term success will require
continued attention and advocacy by the state’s employers to
maintain a fair, predictable and efficient system for both
businesses and injured workers.
“We know businesses can be severely impacted if the reforms are
rolled back, exposing our business community and business
communities throughout the state to unscrupulous lawsuits,”
stated Cynthia Schneider, Chair of the Corona Chamber’s
Legislative Action Committee. “This will ultimately cause an
economic downturn at time when businesses are already feeling
the impact from the latest housing crisis,” continued Schneider.
January 5, 2008
Corona Chamber Continues to
Highlight the Fight Against Workers’ Comp Rate Increases
The Corona Chamber applauds California Insurance Commissioner
Steve Poizner’s recommendation late last year to not raise the
“pure premium advisory rates” for workers’ compensation
insurance beginning January 1, 2008. This will help insure that
reforms from 2004 continue to help businesses maintain stability
when dealing with the workers compensation system. It also
stresses the need to continue fighting against any type of
workers’ compensation rate increase for the future.
The Corona Chamber continues to highlight the excessive workers'
compensation costs that result in the loss of jobs, the closing
of businesses, businesses moving out of the state and out of
Corona, and businesses deciding not to locate in the state and
city of Corona. In 2004, the legislature and Governor
Schwarzenegger worked together to reform the workers
compensation system. Those reforms are working.
“Corona businesses can continue down the path of continued
success when dealing with workers’ comp insurance with the
mindset of no immediate rate increases,” stated Bobby Spiegel,
President and CEO of the Corona Chamber. “We support the
Commissioner’s recommendation not raise the pure premium
advisory rates and thank him for keeping businesses stable,”
continued Spiegel.
Pure premium rates, which are set twice per year, reflect
expected losses and loss adjustment expenses on a statewide
basis for each industry classification, such as carpentry or
roofing. Pure premium rates are not binding, but provide a
benchmark for rates set by insurance companies. The state’s
largest insurer, the State Compensation Insurance Fund (“State
Fund”), announced earlier this week that its rates would remain
at the same level.
The Workers’ Compensation Insurance Rating Bureau (WCIRB), which
analyzes the system and recommends pure premium rate adjustments
to the Commissioner, had previously recommended a 5.2 percent
increase due to increased costs for administering claims and
recent legislation (AB 338) increasing costs for temporary
disability benefits. According to the WCIRB, “pure premium rates
for individual classifications will change (some higher and some
lower) based on the approval of new classification
relativities.”
August 17, 2007
Corona Chamber
Fights Effort to Increase Workers Compensation Costs
The Corona Chamber of Commerce continues to fight proposed
legislation that would allow for workers’ compensation
increases. A pending job killer in the State Legislature, SB
942, would create new requirements for employers when an injured
employee returns to work. This would add to the costs of workers
compensation, which California saw spiral out of control three
years ago.
Click here to take
action on SB 942.
Current law protects employees from discrimination based on
their workers’ compensation claims. SB 942 would create an
assumption that an employer has discriminated against the
employee if the employee was not returned to work with full pay
and benefits within one day of the employee being released to
full duty.
SB 942 also changes the timeframe of which supplemental job
displacement vouchers are distributed. SB 942 will revert the
workers’ compensation system back to the days of high premiums
and will ultimately have businesses pay for the out of control
costs it mandates. This is the wrong direction for Corona
businesses and employees.
May 30, 2007
Corona Chamber
Fights Effort to Increase Workers Compensation Costs
Corona Chamber-opposed SB 936 (Perata) increases employer costs
by doubling permanent disability benefits in the California
workers’ compensation system.
“The Corona Chamber believes that there is no statistically
valid and objective evidence that warrants an increase in
benefits,” stated Cynthia Schneider, Chair of the Corona
Chsamber’s Legislative Action Committee (LAC).
The drop in overall amounts spent on permanent disability
benefits is due to the application of objective medical
evaluations using American Medical Association guidelines, the
appropriate use of apportionment, the reduction of benefit weeks
for low ratings, and return-to-work adjustments.
Prior to the reforms of 2004, the workers compensation system
was out of control. It harmed employees by creating an
adversarial system focused on litigation and disability instead
of reasonable and appropriate medical treatment and return-to
work, and it did so at incredible cost to employers. Workers'
compensation premiums and system costs tripled from 1999 to
2003. Outside of the high cost of operating in California,
skyrocketing workers’ compensation premiums had a negative
impact on businesses and local governments to the point where
expansion of the workforce came at a high price and public
services suffered.
According to the Public Policy Institute of California, one of
the major reasons for skyrocketing costs was the increasing
number of permanent disability claims. Before the implementation
of SB 899 (Poochigian), permanent disability claims were filed
at a rate of three times the national average, and California
was 20 percent higher than the next highest state. A subjective
system of work preclusions led to injured workers getting higher
permanent disability rates, and litigation that preyed on this
subjectivity compounded the situation.
Although there has been evidence of a drop in benefits, the
Corona Chamber believes that California should take a
data-driven approach to reviewing the available information
before considering a permanent disability increase, let alone
doubling benefits. Measuring the adequacy of permanent
disability ratings under the current system by comparing them
against the old system is irrational.
Premiums have come down, objectivity has been established, and a
sense of balance has been returned to the California workers’
compensation system. California’s private and public employers
stand ready to resolve any inequities that have resulted from
recent reforms; however, the Corona Chamber believes that
California cannot proceed on a path that will lead the state
back to the days of skyrocketing premiums, adversarial
litigation, and an unbalanced system.
May 15, 2006
Corona Chamber Supported Workers' Compensation Reforms Beginning
to Take Effect
The overhaul of the workers’ compensation system in 2004 is
adding to the vitality of the Corona job climate. The series of
reforms are fixing the problems and the reduction in premiums
shows they are working. The Corona Chamber anticipates that
trend to continue for the local economy and urges the state
legislature to continue to support the reforms of 2004.
Background
California Insurance Commissioner John Garamendi recently
reported that since the workers’ compensation reform measures
were passed by the California Legislature in 2004, premiums for
workers’ compensation insurance have dropped an average of
26.5%. Workers’ compensation insurance policies written or
renewed after July 1 have decreased an average of 14.6%. As a
result, California business owners are starting to see
considerable advantages from the workers’ compensation
insurances changes. Costs are decreasing and the system is
improving dramatically for small and medium-sized California
corporations.
Workers’ compensation insurance was habitually claimed by
employers as the most onerous aspect of owning a business in
California during July 2003. The skyrocketing rates were
threatening the viability of many California businesses and
genuinely injured workers could not be appropriately compensated
due to fraud and incompetence. This premium decrease indicates a
restored competition among insurance agencies and the severe
reductions in benefits collected by employees.
“Business owners can now be optimistic about the number of
claims and can feel more in control about their work
environment,” said Bobby Spiegel, President and CEO of the
Corona Chamber. “The Corona Chamber is thrilled to witness these
benefits created by the workers’ compensation cutbacks. Our
membership is finally experiencing a substantial reward from all
the legislative efforts over the past two years.”
Insurance Commissioner Garamendi believes that there is more
relief possible for employers because all of the reforms have
not been realized. The latest numbers from the Workers'
Compensation Insurance Rating Bureau reveal that costs of the
program are coming down. The bureau estimated that workers'
compensation expenses in 2004 fell to $9.5 billion, down 17%
from 2003. 2004 also experienced a decrease in both the
estimated total cost per claim and the frequency of claims.
California Governor Arnold Schwarzenegger predicted that the
workers' compensation reform passed by the Legislature in April
of 2004 would slash premiums by 30%. The Governor’s goal is to
allow businesses to keep employees and not relocate by revamping
the workers’ compensation program.
March 20, 2005
Fight to Reform California's Workers' Compensation System
Continues at the Corona Chamber of Commerce
California’s workers’ compensation has been a system in crisis.
The harmful impacts on employers and workers alike initially
drove the reform of California’s broken system. It is especially
important to the Corona business members to be aware of these
efforts to reform.
“The Corona Chamber will continue to pressure for the critical
Worker’s Compensation reforms of 2004 to stay in place this
year,” stated Tom Kenney, Chairman of the Corona Chamber
Legislative Action Committee.
In 2004 lawmakers responded by enacting a series of reforms,
finishing in the comprehensive reform proposal championed by
Governor Schwarzenegger.
The 2004 legislation, Senate Bill 899, was crafted to address
many of the core issues plaguing the system by:
- Stopping the high incidence of unnecessary and costly
litigation
- Provide consistent and predictable outcomes for disabled
workers and that encourage return to work
- Improve the quality care, affordability, and expeditious
medical treatment using proven methods
- Ensure that employment injuries and benefits reflect degree of
causation correlate with the injury severity
Passage of SB 899 is just a first step. The Corona Chamber is
working to ensure that the legislation is implemented as
intended and not undone by reform opponents. Additional
regulations are needed; although state regulators have adopted
most of the administrative regulations required in SB 899.
Reform opponents — primarily those who profited from the
complexity of the old system — are challenging many of the key
reforms in court and the Legislature.
The recent reform will reduce workers’ compensation system costs
by several billion dollars according to estimates by the
Workers’ Compensation Insurance Rating Bureau (WCIRB).
Significant reductions in insurance premiums paid by California
employers have occurred because of the reform’s cost savings.
Another outcome is that competition among insurers is
increasing. More reductions are in the pipeline.
California’s economic future will be deeply impact by realizing
the full cost savings from reform. It is critical to both public
and private employers that more reductions are placed in the
pipeline. Savings for businesses will help employers create
jobs, provide raises and benefits and keep their operations in
California.
February 1, 2006
Workers’ Compensation
Legislation Back in 2006
In September 2005, Governor Arnold Schwarzenegger finalized his
action on the bills passed by the California Legislature during
the first year of the 2005-2006 legislative session.
When measures where
first introduced at the beginning of the 2005 session, over four
dozen workers’ compensation bills were introduced. Although most
of these bills focused altering the reforms mandated by
legislation passed in 2003 and Senate Bill 899 (Poochigian),
there were several measures that would reinforce and strengthen
California's workers' compensation.
On October 7, 2005,
none of the proposed workers’ compensation legislation was
passed by the Legislature nor signed by Governor Schwarzenegger.
California legislators, Assembly Speaker Fabian Nunez, and the
Governor concluded that further improvements should be saved
until the most recent measures have had time to fully infiltrate
the system.
Despite the
unanimous waiting period, the following four bills will create
another stumbling block for California’s workers' compensation
system: AB 1549 (Koretz), SB 46 (Alarcon), SB 538 (Kuehl) and SB
1023 (Dunn). First, AB 1549 will allow chiropractors and
acupuncturists to become Independent Medical Reviewers. Second,
SB 46 will impose a rate regulation scheme on workers'
compensation insurers that will reduce the increasing
competition in the workers' compensation insurance market
currently helping to bring down costs for employers. Next, SB
538 will place burdensome restrictions on the new Medical
Provider Networks established by SB 899. Finally, SB 1023 will
enforce a redundant penalty structure that was previously
revised within SB 899. SB 1023 was vetoed by Governor
Schwarzenegger after passing the Legislature.
On the other hand, there are two bills that will provide further
savings for employers. SB 178 (Poochigian) will cut the red tape
for medium-sized employers forming self-insurance pools as a way
of reducing their workers' compensation costs. The other
measure, SB 292 (Speier), will save employers money by closing a
loophole that allows medical providers to repackage drugs for
sale a huge mark-ups.
Now that the Legislature is back as of the first week of
January, there are a few legislative agendas to watch. First,
Assembly Speaker Nunez expressed an interest during the 2005
session to research a more "comprehensive" workers’ compensation
reform. The Speaker is expected to propose changes to the new
permanent disability rating system that was enacted January 1,
2005. Additional legislation with goals to diminish employers’
savings resulting from SB 899 will be proposed by the California
Applicants' Attorneys Association (CAAA) during the 2006
legislative year. The final to watch in 2006 is the costs of the
workers’ compensation system. Most of the reform measures passed
in 2003 will have penetrated the system allowing legislators the
time needed to determine how well the system is working for both
employers and injured workers.
With many bills shelved and many agendas proposed in 2005, there
will be many workers’ compensation issues to take action on
during the 2006 legislative session.
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