Signs Of Conflict On California’s Workers’ Comp Battleground

For over a century, California law has required employers to provide medical care and, if necessary, cash payments to workers suffering from job-related injuries and illnesses. This protection is called workers’ compensation, or workers’ comp. 

California workers’ comp law governs eligibility for benefits, payment rates, and medical care. Each year, California employers spend over $21 billion to buy insurance coverage or pay claims from their self-insurance reserves, equating to roughly $2 for every $100 of payroll.

Of course, such a large sum of money will naturally attract interest groups and lobbyists seeking to adjust operational rules in their favor.

Every decade or so, five groups go to war, with three of the five cutting a deal to grab a larger portion of the financial pie and pushing it through the Legislature.

About 10 years ago, employers and labor unions made a deal, with the implicit blessing of workers’ comp insurance companies, “to lower medical costs and use the savings to increase cash benefits for disabled workers and decrease employers’ insurance premiums,” according to MSN.

Lawyers specializing in workers’ comp cases and medical care providers were left out of the deal, arguing the deal benefited employers more than injured employees. 

Since the deal was inked, insurance costs as a percentage of payroll dropped by more than two-thirds from their peak in 2003. Even so, California employers are still paying the nation’s fourth highest workers’ comp costs.

In response to the COVID-19 pandemic, California Gov. Gavin Newsom and the Legislature expanded medical workers’ presumption for certain illnesses, qualifying them for workers’ comp benefits without having to prove a connection to their job.

More than one year into the pandemic, several bills currently on the table would expand presumptions to other workers. For example, lifeguards in San Diego could receive benefits for nine illnesses, in addition to skin cancer. Game wardens and state park rangers would also have a skin cancer presumption. Another bill would add more presumptions for nurses.

If passed, these measures would “directly or indirectly increase costs and/or reslice the pie,” according to MSN. If labor unions forge an alliance with medical and legal groups, then the chances of a major workers’ comp overhaul are incredibly high.

Sources:

https://www.msn.com/en-us/money/savingandinvesting/workers-comp-conflict-heating-up-again/ar-BB1fjQpI