Clean-up Legislation vs. More Workers' Comp Reform

Saturday, January 17, 2004 | 0

AB 227 and SB 228 were only the beginning of the Legislature's efforts at reform. Spurred by "holes" in these statutes as written, not to mention pressure from the new governor, the Legislature commenced a Special Session on November 18th where the State's budget problems and workers' compensation where the focus of attention.

Senator Burton is sponsoring a bill (SBX4 1) to repeal AB 227/SB 228, Senator Alarcon is sponsoring a clean-up bill (SBX4 9) for 227/228, and Assemblyman Maldonado and Senator Poochigan have introduced bills (ABX4 1 and SBX4 3 respectively) to promote Governor Schwarzenegger's ideas for workers' comp reform. The Legislature began its holiday recess on December 12th without passing any of these bills so 227 and 228 are what we have until sometime after the Legislature reconvenes on January 5, 2004.

Although it has passed out of committee, Sen. Burton's bill has little chance of reaching the Governor's desk. The real battle should be between Senator Alarcon's clean-up bill and the bills promoting the Governor's reform proposals.

The power players behind last year's bills (Labor and Employers) will not want to give up the gains they feel they obtained through 227/228. However, employers are clearly dismayed that the 227/228 "savings" are producing little in the way of premium reductions and governor Schwarzenegger has demonstrated some considerable muscle (sorry) during his first couple of months in office. It should therefore not surprise us if we eventually see a hybrid bill containing elements from both SBX4 9 and SBX4 3.

What will this mean for the VR benefit? We need to keep in mind that whatever bill(s) the Legislature sends to the Governor will contain an urgency provision because it will need to address claims already filed in 2004. It is therefore possible that the legislature could eliminate VR for all injured workers except those who have started the process.

If the voucher survives, the critical issue will be when it becomes available for eligible injured employees. Will it remain tied to the PD award when it will be of little use to most injured workers? Or will it be available immediately after the issue of medically appropriate work with the pre-injury employer is resolved?

While we are waiting, we will need to implement 227/228 requirements. That means employers/insurers may have to start sending a "Notice of Rights" starting this month. We are again reminded of the old curse, "May you live in interesting time." Stay tuned.

Contributed by vocational rehabilitation expert Allan Leno, Leno & Associates, (818) 370-8859, allanleno@leno-assoc.com.

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