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Legislative
efforts to overhaul workers' compensation have
reduced benefits to injured workers, but many
small employers say savings have not trickled
down to them.
The
small-businesses owners' reactions come as
surveys suggest workers' compensation
insurance rates have been trimmed
significantly across the board.
In Union Bank
of California's Annual Small Business Survey
released March 2, 56% of small-business owners
said their workers' compensation premiums
remained the same this year compared with
2005. Twenty-nine percent said their premiums
increased, while 15% said their premiums
decreased. The survey included responses from
almost 2,000 California small-business owners.
Union Bank of
California's survey contrasts with the state's
data.
Workers'
compensation insurance rates dropped 46% from
July 2003 to January 2006, the lowest prices
in 10 years, according to a study compiled by
Bickmore Risk Services. The study was mandated
by Senate Bill 899, which was enacted in 2004.
SB 899
created new guidelines for medical examination
of injured workers and mandated a study to
evaluate of insurance premium rates.
Recent state
surveys are flawed because they do not match
the perceptions of small-business owners, said
Charles Cleveland Jr., a workers' compensation
specialist at Cleveland & Metz in Rancho
Cucamonga.
"It's
like saying there are no problems going on in
Iraq and Iraqis all love democracy,"
Cleveland said.
Cleveland has
five employees and his annual $6,000 workers'
compensation insurance premium remains
unchanged from previous years, he said.
"Small
businesses are upset and workers are upset
because their benefits have been cut. I think
there should be more regulation. Workers'
compensation is one of the few types of
insurance not regulated by the Department of
Insurance. Without regulation, there is not
going to be any rollback," Cleveland
said.
The state's
workers' compensation reforms significantly
reduced claims, but pushed some businesses to
their limits.
Hermann
Atencio owned and managed four
vocational-rehabilitation schools, called
Inland Empire School of Optics, that
specialized in training injured workers to be
opticians. Tuition was paid through workers'
compensation benefits, but enrollment began to
level off last year. Three of the four schools
have since closed, Atencio said.
"It
decimated our industry," he said.
"We seldom get calls."
Atencio is
converting his business into a home care
health service, he said.
Workers'
compensation insurance providers weigh several
factors when determining the premium rates
they charge, including the industry, previous
accident claims at the company and the number
of employees at the business.
Blue-collar
industries, such as construction and roofing,
pay the highest workers' compensation premiums
because of the high probability of serious
injury associated with those jobs.
The state
Department of Insurance only reviews a
company's workers' compensation rates, said
Susan Gard, spokeswoman for the state Division
of Workers' Compensation. Insurance providers
are not required by the Department of
Insurance to adjust their rates.
"Not all
individual employers are going to enjoy all of
the savings because of the number of accident
reports about the employer and the risk factor
in their company," Gard said.
Employers may
overlook information in their policies that
contributes to unchanged or higher premiums
compared with previous years, said Michael
Murphy, an insurance broker and owner of
Workers Compensation Specialists Insurance
Services in Chino.
"The
rates are definitely declining," Murphy
said. "I see it in my commissions and my
premiums. I think it has dropped significantly
and that is probably due to the reforms in the
claims plus the re-entry of private
[insurance] carriers into the state," he
said.
(Article
taken from The Business Press)
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