September 20,
2006
Statement on Governor's Veto of Chamber Opposed 'Job Killer' Workers'
Compensation Bill
Long Beach Area Chamber of
Commerce President and CEO Randy Gordon released the following statement
praising Governor Arnold Schwarzenegger for vetoing “job killer” legislation
that would have undermined the state’s successful workers’ compensation
reforms and cost employers billions of dollars:
“Today the Governor exercised sound and visionary leadership by vetoing
Chamber opposed legislation (SB 815) which would have weakened the
achievements of the 2004 overhaul of California's workers' compensation
insurance system.”
“The Governor’s actions showcase his commitment to employers and employees.
SB 815 would have arbitrarily doubled the duration of permanent disability
payments without sound data on which to base the increase.”
“This veto evidences the Governor’s stewardship of a growing economy. The
economy is strong, because Governor Schwarzenegger brought lawmakers
together to fix California’s broken workers’ compensation system. The
Governor’s reforms of 2004 ended the fraud and abuse that had nearly
bankrupted the system, allowing the economy to rebound by stopping the
massive rate increases that were forcing businesses to close their doors.
Since then, workers’ compensation premiums have been cut in half, and
California has created 600,000 new jobs.”
“The Chamber-supported reforms in SB 899 by Senator Charles Poochigian in
2004 made fundamental changes to the way the workers’ compensation system
determines the level of injury and the amount of disability assigned to an
injury and created new medical networks to provide quality, cost-effective
care to workers. This package ensured that medical treatment follows
nationally recognized guidelines and sets clear parameters for what is
acceptable treatment for injured workers in the system, while also reducing
excessive litigation.”
“SB 815 would increase permanent disability benefits by increasing the
number of benefit weeks for each level of disability for injuries occurring
on or after Jan. 1, 2007. This bill would be phased-in over three years.”
“The business community of Long Beach commends Governor Schwarzenegger for
rejecting certain legislative attempts at damaging the economy, and stand
with him in defending historic reforms that have made a real difference in
the lives of many Californians. The Chamber will continue to do whatever it
takes to defend workers' compensation reforms in order to ensure the
strength of California's economy."
February
23, 2006
Long Beach Chamber Calls on
Elected Officials to OPPOSE Attempts to Reverse the 2004 Workers'
Compensation Reforms
The Long Beach Chamber held a press conference at the
SNUGTOP Custom Fiberglass Manufacturing Company
(
www.snugtop.com
) headquartered in West Long Beach on February 23. The
Chamber highlighted that excessive workers' compensation costs
result in the loss of jobs, the closing of businesses, businesses
moving out of state, and businesses deciding not to locate in the
state.
In 2004, the legislature and Governor Schwarzenegger worked together to
reform the workers compensation system. Those reforms are working.
The Long Beach Chamber calls upon our legislators, who, in 2004, supported
the reform in their entirety, to not support any legislative or initiative
attempt to reverse those reforms.
"Workers’ compensation costs were increasing dramatically, and having a
severe impact on our business. Since reform, we have seen a dramatic drop in
claims and cost per claim, as sanity has been restored to the system,"
stated Joel Fierberg, CFO of SNUGTOP.
SNUGTOP is the west
coast’s largest manufacturer of fiberglass camper shells and tonneau covers
for pickup trucks, with approximately 350 employees
According to Fierberg:
- SNUGTOP's workers'
compensation costs
doubled between 2001 and 2004. Today SNUGTOP is spending $1 million less on
workers' compensation. This represents a 50% reduction between 2004 and 2006
What has SNUGTOP done with the savings?
- Invested in product development for new international customers - programs
realized to date currently provide about 50 jobs at SNUGTOP
- Invested in ongoing safety training for employees and purchased equipment
to help make this a safer place to work
- Invested in leadership training for factory management personnel to help
ensure that employees’ needs are better met
- Continue to pay 100% of the cost of group medical insurance for employees,
despite annual increased costs of approximately 10%
- Provided enhanced Sick Pay benefits to employees
- Paid out over $36,000 in safety bonuses to foremen and supervisors for
2005 performance
In 2004, raising workers’ compensation costs were causing the loss of jobs,
the closing of businesses, businesses moving out of state, and businesses
deciding not to locate in the state. These costs were also putting a
stranglehold on the budgets of local governments and non-profit
organizations. In short, workers’ comp had become a drag on our entire state
economy.
"The Long Beach Chamber and others worked to publicize the drastic increases
in workers’ compensation costs that had severely burdened California
employers, including businesses, non profit organizations, cities,
hospitals, universities, schools and churches," stated Randy Gordon,
President and CEO of the Long Beach Chamber.
The legislature and Governor Schwarzenegger worked together to reform the
workers’ compensation system. In 2004, Senate Bill 899 was passed
overwhelmingly and supported by Republicans and Democrats alike, including
those representing our community.
|
 |
|
Long Beach
Chamber President and CEO Randy Gordon,
SNUGTOP President and CEO
Hartmut
Schroeder (center) and Long Beach business
leaders tour the SNUGTOP manufacturing
facility after the press conference. |
|
Although it is still too
early to accurately gauge the total impacts the reforms are having on the
system, we believe that those reforms are working as intended. Now some
lawmakers are publicly calling for a roll-back of reform—a move that will
halt all the progress that has been made. Groups that thrived under the old,
broken system continue to file lawsuits against the reform.
In addition, three initiatives that would turn back the clock to the old,
broken system have been cleared for circulation. Going backward, in the Long
Beach Chamber's view, is not an option and the Chamber will do whatever is
necessary to protect these critical reforms.
If reform is undone, we can expect the same problems we saw prior to reform.
The economic vitality of our region will suffer. Long Beach companies will
be forced to scale back services, raise costs, or lay off employees. Many
businesses will look outside the state when contemplating expansion,
relocation, or simply shutting down.
The Chamber will vigorously
oppose any initiative that attempts to undo the successful worker's
compensation reforms. We are aware that three initiatives are being promoted
and are in the signature gathering stage for the November, 2006 election. As
drafted, these proposed initiatives would seriously undermine the successful
reforms. Initiatives are not the proper method to amend such complicated
law.
Furthermore, these reforms are still in the implementation phase, with much
more time needed to accurately determine what their true impact on the
system will be. What we do have is an initial assessment from the California
Department of Industrial Relations, which was released earlier this month.
The report found that to-date the reforms have:
- Decreased workers’ compensation rates by 46% (from average rates of $4.81
per hundred dollars of payroll to $2.59 from July 1, 2003 to January 1, 2006
(a three-year period).
- Rates are now below where they were in 1996. (Adjusted for changes in the
mix of payroll by industry.)
- The reforms have saved more than $8 billion and as much as $15 billion
compared to what costs would have been without reform.
o Competition among insurers is increasing and more employers have options
other than State Fund.
- They reduced the high incidence of unnecessary and costly litigation
- They are producing consistent and predictable outcomes for disabled
workers and encourage return to work
- They are improving medical treatment using proven methods of delivering
quality care affordably and expeditiously
- They are ensuring that injuries directly result from employment and
benefits reflect degree of causation related to the injury
- State regulators have adopted most of the administrative
requirements of SB889
- Best of all, reports confirm that the quality of care for injured
workers has improved, and that workers are returning to work ready to make
contributions the their employer’s company.
The savings generated by SB 899, however, remain at risk because of the
ongoing barrage of lawsuits and litigation. It may be some time before
courts settle some of the issues being challenged. Until then, the total
savings from reform is unlikely to materialize. This reform is a work in
progress and will take some time to settle down. Results are still being
studied.
The Long Beach Chamber will
continue to monitor this issue and do whatever it can to ensure that
regulations are kept to a minimum and do not place Long Beach businesses at
a competitive disadvantage.
February
13, 2006
Long Beach Chamber Continues to Represent
the Interests of Long Beach Businesses in the Fight to Reform
California's Workers' Compensation System
Plagued by skyrocketing costs
and widespread conflict, California’s workers’ compensation was
a system in crisis. The harmful impacts on employers and workers
alike drove the need to reform California’s broken system.
Lawmakers responded by enacting a series of reforms, culminating
in the comprehensive reform proposal championed by Governor
Schwarzenegger in 2004.
This legislation, Senate Bill 899,
was crafted to address many of the core issues plaguing the
system by:
- Reducing the high incidence of
unnecessary and costly litigation
- Producing consistent and predictable outcomes for disabled
workers and encourage return to work
- Improving medical treatment using proven methods of delivering
quality care affordably and expeditiously
- Ensuring that injuries directly result from employment and
benefits reflect degree of causation related to the injury
Passage of SB 899 was just the first step, and the Chamber is working to ensure that the legislation is implemented as
intended and not undone by reform opponents. Most of the
administrative regulations required to turn SB 899 into actual
system change have been adopted by state regulators, but some
additional regulations are still needed. Meanwhile, reform
opponents — primarily those who profited from the conflict,
uncertainty and subjectivity of the old system — are challenging
many of the key reforms in court and the Legislature.
The Workers’ Compensation Insurance
Rating Bureau (WCIRB) has estimated that recent legislative
reforms will reduce workers’ compensation system costs by
several billion dollars. Cost savings have already translated
into significant reductions in workers’ compensation insurance
premiums paid by California employers, with more reductions in
the pipeline. Meanwhile, competition among
insurers is increasing.
Realizing the full cost savings
from reform is critical to both public and private employers, as
well as California’s economic future. Savings for local
government mean more resources for public safety and
infrastructure. Savings for schools mean more resources for
teachers, textbooks and facilities. Savings for businesses will
help employers create jobs, provide raises and benefits and keep
their operations in California.
February 3, 2006
Legislative
Update: 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, 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.
January 2006
State of California Releases Study of the Effects of the 2004
Legislative Reforms on California Workers’ Compensation
Insurance Rates
Primarily due to the
legislative reforms of 2004, the State of California projects
that the approved insurance rates have decreased by 46% (from
average rates of $4.81 per hundred dollars of payroll to $2.59
from July 1, 2003 to January 1, 2006 (a three year period).
Rates are now below where they were in 1996. These rates have
been adjusted for changes in the mix of payroll by industry.
Click here to download the report.
January 9, 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.
June 18, 2005
Workers' Compensation Rates
Continue to Decline
Recent recommendations of double-digit workers' compensation
rate reductions are the result of the reforms that passed
last year beginning to take hold. New guidelines have
brought California's standards closer in line with those
used by the rest of the nation and are helping keep costs
down. The best way to restore competition, and provide
much-needed relief to small businesses, is to see that last
year's workers' compensation overhaul is fully implemented.
Rate Recommendations Indicate Further Relief
Twice a year, the Insurance Commissioner recommends workers'
compensation rates - known as the "pure premium advisory
rate" - as a target for insurance premiums. On June 1, the
Insurance Commissioner announced his pure premium rate
recommendation reduction of 18% for workers' compensation
policies written after July 1. The Workers' Compensation
Insurance Rating Bureau (WCIRB), the designated statistical
agent of the Insurance Commissioner, recommended a 13.8%
rate reduction. The cumulative rate reduction recommended by
the Insurance Commissioner is 36%, while the cumulative
WCIRB rate reduction recommended since reform is 33%.
While the Commissioner's pure premium rate is merely
advisory, California insurers submit their actual rate plan
to the Commissioner for his approval. The Commissioner has
approved insurance rate plans with an average rate reduction
of 17% between 2003 and January 2005, despite the fact that
his pure premium rate recommendations totaled 22% (see chart
below).
Note: Average Insurer Rate Changes for 7/1/05 and the
Cumulative Average Insurer Rate Change will be available at
the end of June.
Insurance Commissioner Approves an Average 14% SCIF Rate
Reduction, 4% Less Than His Pure Premium Advisory Rate:
The insurance Commissioner has also approved a rate
reduction plan for the State Compensation Insurance Fund (SCIF)
which will provide an average 14% reduction for new or
renewing policies as of July 1. The SCIF plan also includes
an average 3.8% rate reduction for already in-force policies
and a new safety credit for small employers. State Fund
rates will be down 26.2% overall since the workers'
compensation overhaul began two years ago.
Other Insurers File Rate Reductions:
To date, carriers have filed rate reductions of 10.4% to 18%
for their July 1, 2005 rate filing. These rate reductions
are pending before the Insurance Commissioner and if
approved, would apply to new or renewing policies beginning
July 1, unless otherwise noted.
The impact of rate reductions on individual policyholders
will depend on when they last renewed their policies and
their own experience rates. For policyholders renewing after
July 1, their rate will include the January 1, 2005 and the
proposed July rate reduction adjusted for their own
experience ratings.
Reclassification or Inappropriate Action Could Slow Rate
Reductions:
Some employers have expressed concern that despite approved
rate reductions, their individual rates have not gone down.
If employers feel that their employees have been
inappropriately reclassified or they have seen other changes
to their policies that they believe have incorrectly
affected rates, they may seek assistance from the WCIRB
Ombudsman. The Ombudsman is there to assist policyholders
with obtaining and understanding information about their
insurance.
April 28, 2005
Long Beach Chamber Applauds State
Senate Committee Confirmation of Andrea Hoch as Director of Workers'
Compensation
The Long Beach Chamber applauds the State Senate for confirming the
nomination of Andrea Hoch. She has done an exceptional job this far in
implementing the cost-saving reforms enacted last year, and her continued
leadership is key to bringing costs down further for California’s employers.
The bi-partisan overhaul of California’s broken workers’ compensation system
is just beginning to bring cost savings to California’s job creators. It is
essential that we keep on course to enact the entire reform package to
improve our business climate, keep employers here and bring new jobs to
California.
Background
Andrea Hoch is waiting to be confirmed by state Senate as California's
Administrative Director of the Division of Workers’ Compensation.
Ms. Hoch was appointed by Governor Arnold Schwarzenegger to the division
last year to implement critical workers’ compensation reforms passed by the
legislature. Ms. Hoch has done an exemplary job of meeting necessary
deadlines to implement the reforms and putting the workers’ compensation
system back on track.
Redondo Beach business owners cannot afford to go backwards. Thanks to Ms.
Hoch’s work the system is showing strong signs of recovery.
Ms. Hoch should be allowed to continue the challenging job of restoring our
workers’ compensation system.
Letter to
State Senate on Confirmation of Ms. Hoch
March 31, 2005
The Honorable Debra Bowen
California State Senate
State Capitol, Room 4040
Sacramento, CA 95814
FAX: (916) 323-6056
Dear Senator Bowen:
On behalf of the Long Beach Area Chamber of Commerce (The Chamber), I urge
your vote to approve the confirmation of Andrea Hoch as Administrative
Director of the Division of Workers’ Compensation.
Last year, Ms. Hoch was appointed by Governor Arnold Schwarzenegger to the
division to implement critical workers’ compensation reforms passed by the
legislature. Ms. Hoch has done an exemplary job of meeting necessary
deadlines to implement the reforms and putting the workers’ compensation
system back on track.
The Chamber represents more than 1800 businesses in Long Beach. Nearly 15
million people live, work, and vacation within one and half hours from our
community. We have strongly oppose the skyrocketing costs associated with
workers’ compensation has on our local economy and jobs. Business owners
cannot afford to go backwards. Ms. Hoch’s dedication and effort to restore
our workers’ compensation system is showing strong signs of recovery for
California.
I respectfully request for your support to confirm Andrea Hoch’s appointment
as the Administrative Director of the Division of Workers’ Compensation. If
I you have any questions regarding this letter, please do not hesitate to
contact me at (562) 983-1241.
Sincerely,
RANDY GORDON
President and CEO
Long Beach Area Chamber of Commerce
November 14, 2004
Workers' Compensation Rates
Start Decline
On September 2, 2004, the State of California released its fiscal analysis
of California's workers' compensation costs. The data is based on
information submitted by insurers in March 2004.
The report found that the average statewide insurer rate per $100 of payroll
for policies written in the first quarter of 2004 is $5.89, down eight
percent from the $6.37 rate charged for the second six months of 2003.
This amount is seventeen percent below the average rates that would have
been charged in the first quarter of 2004 if the cost-saving-reforms of 2003
and Senator Poochigian's workers' compensation overhaul this year (SB 899)
had not been enacted. Of course, much more relief is still needed.
Other information found in the report includes the fact that indemnity claim
frequency for the first quarter of 2004 is estimated to be 5% lower than for
the first quarter of 2003. Currently, 2004 indemnity claim frequency is
estimated at approximately one half of its all-time high.
Important Regulatory Work Underway SB 899 (Poochigian) was signed into law
on April 19, 2004. (see story on the right)
While some aspects of the legislation went into effect immediately, the
Division of Workers' Compensation is currently in the process of developing
regulations to implement some of the most important components. Guidelines
for implementing employer doctor networks and the creation of a new
permanent disability schedule are some of the most important, and
potentially cost-saving regulations still awaiting approval.
Source: State Senator Charles Poochigian, author of the historic workers
compensation reform legislative bill SB 899
July 9, 2004
Governor Names California Chamber
Executive to Chair State Fund
Governor Arnold Schwarzenegger this week announced the appointment of
California Chamber Senior Vice President Jeanne Cain as chairwoman of the
State Compensation Insurance Fund Board.
“Reinvigorating the State Compensation Insurance Fund Board is the next step
in achieving real workers’ compensation reform for California’s employers
and workforce,” the Governor said upon announcing the appointment of Cain
and two other board members — Kent Dagg, executive director of the Shasta
Builders Exchange, and Vincent Mudd, president and chief executive officer
of San Diego Office Interiors.
“It is essential that the Board work toward creating an environment of
increased competitiveness in the marketplace to lower insurance costs to
businesses and attract more insurers to California,” the Governor continued.
“I am confident that Jeanne, Kent and Vincent are keenly aware of the issues
confronting the system and will work to foster an atmosphere that refocuses
the State Fund toward its originally intended role in the market.”
“I am honored by Governor Schwarzenegger’s appointment and his confidence in
my abilities to meet the challenges ahead,” Cain said. “Workers’
compensation costs are a significant issue to California’s economic
recovery. I look forward to helping provide the best product for California
employers and workers.”
The State Compensation Insurance Fund provides workers’ compensation
insurance coverage for many of California’s small and medium-sized
businesses. As the insurer of last resort, the fund currently has a 60
percent market share in California.
The fund board consists of five Governor’s appointees and three non-voting
members: the director of the Department of Industrial Relations, the speaker
of the Assembly and the Senate president pro tempore.
Members appointed by the Governor must be a policyholder or the employee or
member of a policyholder in the State Compensation Insurance Fund for one
year prior to their appointment, and must continue in this status throughout
their appointment period. The Governor appoints one member from organized
labor and four public members and names the chair.
May 13, 2004
Workers' Comp Bureau Suggests
Significant Decrease in Rates
The Workers' Compensation Insurance Rating Bureau of California (WCIRB)
announced this week it will recommend rate reductions of 13-15 percent,
based upon its initial evaluation that California Chamber-supported SB 899
will save the system more than $3 billion.
The rating bureau originally planned to recommend a 12 percent rate increase
in July based on rapidly growing costs in the system. SB 899 will erase that
increase and reduce rates additionally.
”These suggested rate reductions are just the beginning of the benefits
employers will see as a result of the workers’ compensation reforms
contained in Senate Bill 899,” said Charles Bacchi, Chamber legislative
advocate. “Additional rate reductions should occur as the reforms take
place, regulations are completed, and savings are evaluated.”
Once the schedule is adopted, the WCIRB will evaluate the impact SB 899 will
have on permanent disability benefits and present that estimate to the
insurance commissioner.
The WCIRB is expected to submit its evaluation of SB 899 along with its
suggested pure premium rates to Insurance Commissioner John Garamendi at a
hearing today in San Francisco.
The WCIRB estimates that SB 899 will reduce benefits costs by nearly 15
percent or $3 billion and cut loss adjustment expenses by nearly 9 percent
or $300 million.
The proposed premium rates for July 1 are between 13 and 15 percent lower
than the suggested rates presented last fall for January 1 and between 2 and
3 percent lower than the rates approved by the insurance commissioner to
take effect that same date.
April 20, 2004
Legislature Adopts Historic Workers' Compensation Reforms;
Governor Signs Measure in Long
Beach
LBReport.com Article
PressTelegram Article
Los Angeles Times Article
Just before noon
Friday, April 16, the California State
Senate adopted SB 899 (Poochigian) on a 33-3 vote. Earlier, the
Assembly passed the bill 77-3. The bill was passed on an
urgency basis, which means it will take effect immediately.
Governor Arnold
Schwarzenegger will signed the bill in Long Beach on Monday
April 19 at the Boeing C-17 facility.
Governor
Arnold Schwarzenegger released the following statement upon
passage of workers' compensation reform legislation (SB 899,
Poochigian):
"Today we have
another victory for California. I promised in my campaign that
we would reform our state's broken workers' compensation system
and today we have the results. After many weeks of difficult
negotiations, the Legislature was able to put aside the special
interests and join with me to deliver meaningful workers'
compensation reform. Just as we did with Propositions 57 and 58,
both sides came together and rose above partisan politics to
reach a bipartisan consensus. Working together, we have produced
a huge win for California. Our bill provides strong reform that
will save jobs, reduce costs for our employers and improve care
for injured workers. Our state can now become once again the
job-creating machine it once was. With meaningful workers'
compensation reform, California is open for business."
The bill makes
sweeping changes to California's workers' compensation system.
The
compromise legislation will reduce system costs while ensuring
that injured workers receive quality medical care and a fair
basis for compensation. It creates economic incentives designed
to encourage injured employees to return to work as soon as
possible.
Key points of the
bill include:
- Requiring
that disability reports be based on the standards from the
American Medical Associations 5th Edition of Impairment
standards and that the disability schedule be objective and
consistent;
- Ensuring
that employers are only responsible for the portion of the
injured workers’ disability that is the result of their existing
job;
- Closing a
loophole that allowed multiple disability awards in excess of
100% of disability;
- Creating a
new medical network for employers to control unnecessary medical
utilization in the workers comp system that provides that
injured workers’ be treated by a network chosen by the employer.
However, there are extensive provisions to allow injured
workers’ who are dissatisfied with their care to change doctors
within the network and ultimately to ask for an independent
medical review;
- Ensuring
that medical treatment follows nationally recognized guidelines;
- Clear
parameters for what is acceptable treatment for injured workers
in the workers’ compensation system;
- Reducing
excessive litigation by reducing the friction in the permanent
disability system, ensuring that medical decisions are resolved
by doctors -- not lawyers and judges.
The
legislation also ensures that injured workers receive quality
medical treatment while giving employers the tools to discourage
doctor-shopping and discourage lawyers from gaming the system to
leverage settlements. Additionally, the legislation addresses
the permanent disability system the most critical area for
reform by providing greater objectivity and consistency in
permanent disability evaluations.
Overhauling
the workers' compensation system is major step toward restoring California's economic strength.
Pictures from the
Signing Ceremony at the Boeing Facility in Long Beach on April
19, 2004
Governor Arnold
Schwarzenegger speaks as legislative leaders look on.
Alan Zaremberg,
President of the California Chamber of Commerce speaks to the
crowd on the importance of a pro-business California.
With the backdrop
of "Promise Made. Promise Kept"
the Governor is
joined by Boeing employees on stage.
The stage and a C-17
Globemaster in the background.
January 2004
Workers
Compensation Reform - In Depth
The Chamber's public
policy platform listed under the area "Employee Relations" the
Chamber shall "Monitor and provide recommendations to workers’
compensation reform efforts to reduce costs to businesses."
Workers’ compensation is in need of
major reform. While premiums in California are the highest in
the nation, benefits to employees are amongst the lowest in the
nation. The Chamber urges the California legislature to take a
bipartisan approach to this serious issue and to commit to
making urgent and far reaching reforms.
The Chamber has taken the lead in
publicizing the drastic increases in workers’ compensation costs
that have severely burdened California employers, including
businesses, non profit organizations, cities, hospitals,
universities, schools and churches. This has resulted in the
loss of jobs, the closing of businesses, businesses moving out
of state, and businesses deciding not to locate in the state.
The Long Beach Chamber's
Concerns
- Rates are
dramatically rising, forcing Long Beach entities to scale back
services, raise costs, or lay off employees.
- Enacted worker’s
compensation legislation is forcing many businesses to look
outside the state when contemplating expansion, relocation, or
simply shutting down.
-With a growing $26
billion deficit, California must attract new business and
increase its revenue base.
- According to the
Workers’ Compensation Insurance Rating Bureau (WCIRB), the
average workers’ compensation premium rate increased 50 percent
between 2001 and 2002. This rate is 15 percent greater than the
previous high recorded in 1993, which prompted significant
workers’ compensation reforms that saved billions of dollars.
-California’s fiscal
health will only be restored when we have a healthy economy.
Addressing the current workers’ compensation problem will be a
strong, positive step in the right direction.
Email
us for more information.
California’s
workers’ compensation system continues its historic
transformation since the Long Beach Chamber-supported reforms of
2004. Long Beach 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. 
