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Calif.
Governor Signs Bill to Raise Benefits for
Injured Workers
By
Insurance Journal
Feb.
18, 2002
Governor
Gray Davis on Feb. 15 signed into law a
measure, AB 749, sponsored by Assembly
Insurance Committee Chairman Tom Calderon
(D-Montebello), that will raise workers'
compensation benefits in California by $3.5
billion, according to the American Insurance
Association (AIA).
"We
look forward to working with this
administration on the considerable task ahead
to deliver the potential cost savings created
in this legislation," said Mark Webb,
vice president, AIA western region. "If
we are to continue enforcing the agreement
between employers and workers that is the
cornerstone of the workers' compensation
system, then it is incumbent upon those who
negotiated this bill to acknowledge that this
system is fundamentally flawed and that these
flaws will continue to exist now even though
AB 749 has become law."
AIA
urged the inclusion of some components of AB
749, such as extended control over medical
treatment for employers and expanded use of
the Health Care Organization (HCO) system. But
savings from these reforms are not guaranteed
and will not occur for three to four years.
"The
potential costs savings from this bill will
not be realized for several years, in fact,
many of the legislators that voted for this
measure will no longer be in office when the
full impact of this bill occurs," said
Webb.
"There
are many important reforms that were left out
of this bill," said Webb. "At a time
when state and local governments and
businesses throughout California are
struggling, there must be a commitment to
reduce system complexity, litigation and
unnecessary medical treatment, and to restore
the expectations of injured workers and the
employers who pay their salaries."
"Specifically,
we ask the administration to deliver on the
promises made to reduce the costs of
prescription drugs and of outpatient
surgery/facility services," said Webb.
"We also call upon the administration to
review and revise the permanent disability
rating schedule to provide fair and equitable
ratings of permanent disability and to end the
inconsistency, confusion and waste that the
current schedule encourages."
"We
hope the Legislature will reconsider whatever
elements of AB 749 that truly do not benefit
injured workers," continued Webb.
"The ability of an injured worker to
compromise and forfeit vocational
rehabilitation is at cross-purposes with the
heavy investment in returning injured workers
to their jobs, which is also contained in AB
749. Let me be clear - no amount of cash
settlement for rehabilitation benefits will
ever replace a job."
"Furthermore,
the recommendation by the Commission on Health
and Safety and Workers' Compensation to pay
indemnity benefits at a single rate was not
included in AB 749. This recommendation was
previously included in both SB 71 (Burton) and
SB 1156 (Burton)," said Webb. "This
recommendation would have greatly simplified
how insurers pay benefits to injured workers
and reduced the financial impact to the worker
receiving permanent disability benefits that
are lower than his or her temporary disability
benefits. The Legislature should strongly
consider adopting this recommendation, just as
it has in the past."
"In
conclusion, the significant cost increases
contained in AB 749 will place a tremendous
burden on California's economy. If we are to
preserve this system, we must all accept
responsibility for its many failures and must
now all shoulder the burden for its
reform."
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