Dear WCAN Member,

That’s the headline from an article published last week by the Los Angeles Times. The article – and others like it – reflect the heightened discussion over California workers’ compensation issues in recent weeks. With an announcement last Thursday that the pure premium advisory rate for workers’ compensation insurance is recommended to increase by an additional 4.1%, the discussion over how to make the system operate more fairly, objectively and efficiently comes at an important time. The recommended increase would take the average rate per $100 of payroll to $2.51 and cement California’s spot as one of the nation’s most expensive states for workers’ compensation costs.

Following is a quick update on various activities that have been happening around the workers’ compensation discussion.

Employers Make the Case for New Reforms in Sacramento. WCAN members, in partnership with members of the California Chamber of Commerce, California Coalition on Workers’ Compensation and the California Manufacturers and Technology Association, met in Sacramento for employers’ annual Workers’ Compensation Legislative Day on March 26 and 27. Dozens of business owners joined other system stakeholders to discuss with lawmakers the need to make the system work better for less money and direct more money toward injured worker benefits. As in years past, the event was a success, with more than 60 advocates meeting with more than 70 legislative offices. In addition, all 120 lawmakers received information about the system and the need to increase efficiencies and curb abuses to make California more competitive and free up dollars for job creation and public services.

Attendees also heard perspectives on workers' compensation reform from legislative leaders such as Assemblyman Jose Solorio, who is Chair of the Assembly Insurance Committee, and Senator Ted Lieu, who chairs the Senate Labor & Industrial Relations Committee.

Jose Solorio speaks at the Workers' Compensation Legislative Day

Assemblyman Jose Solorio speaks to Legislative Day attendees.

Legislative Committee Discusses Increasing Costs, Worker Benefit Levels. In a rare “joint hearing,” the Assembly Insurance and Senate Labor & Industrial Relations Committees convened on March 28 to hear from key players in California’s workers’ compensation system. Speakers included Insurance Commissioner Dave Jones, representatives of Governor Jerry Brown’s administration, researchers from UC Berkeley and the California Workers’ Compensation Institute, members of the employer and labor communities, as well as those speaking for attorneys and medical providers.

Committee members and stakeholders discussed increasing costs in California’s workers’ compensation system due to rising medical and benefit costs, as well as litigation associated with permanent disability claims and medical liens. They also discussed the impact these costs are having on private and public employers who pay directly for workers’ compensation costs, as well as on insurers that are paying out, on average, $1.30 for each $1.00 in premium taken in, according to Commissioner Jones.

Labor Agency Secretary Marty Morgenstern reiterated the desire of the Brown Administration to increase permanent disability benefits, but doing so by improving efficiency and redirecting existing dollars in the system toward injured workers. Regarding a benefit increase, Morgenstern said, “we cannot take payroll money to do it. We cannot raise the payroll costs to employers at this time.”

Watch the hearing in its entirety here or read a summary here. You can also read this piece by Martin Brady of Schools Insurance Authority that raises issues that should be addressed as part of discussions over permanent disability benefits.

Statewide Listening Tour Kicks Off. Last week, officials from the Department of Industrial Relations and Division of Workers’ Compensation kicked off a series of nine public forums on workers’ compensation issues. The two sessions held in West Sacramento brought together hundreds of system stakeholders to flag problems in California’s system and propose solutions as administration officials evaluate reform options.

Registration for a number of the remaining free forums is still available. You can register here and attendance is highly encouraged.

If you would like to put your thoughts in writing, written comments are being accepted and a sample letter is available here for your use.