Opinion: Pressure is mounting for overhaul of California’s workers’ compensation program

Workers in a warehouse in National City
Workers at a distribution warehouse in National City. Courtesy of OnScene.TV

Fair warning: this column will focus on workers’ compensation, a very complicated subject and completely devoid of sex appeal, but which involves several billion dollars and potentially affects millions of workers.

Workplace compensation, as it is known, has been in effect for more than a century and is meant to provide income and medical treatment to workers who suffer work-related injuries and illnesses without resorting to litigation.

Every year, California employers spend more than $15 billion on insurance to cover workers’ compensation claims, not including the billions more that large employers set aside in self-insurance funds for their mandatory coverage. by the state.

That’s a lot of money by anyone’s standards, which is why there are more or less perpetual political contests over the rules governing who is eligible for benefits and what they can receive.

Over the past half-century, labor compensation policy has followed a pattern. About once a decade, the majority of competing interests – employers, their insurers, unions, medical providers and claims lawyers – agree on certain “reforms” which are then muscled through the Legislative Assembly.

It’s an exercise in pure power politics that benefits the dominant coalition and always hits the minority faction with new costs and/or new restrictions.

The the last time it happened That was ten years ago when a coalition of employers, unions and insurers, with the blessing of the then government. Jerry Brown, strengthened medical care which both reduced costs for employers and provided funds for increased cash benefits.

It worked as expected, or perhaps more than expected, as labor insurance premiums, which averaged around $3 per $100 of payroll at the time, have since fallen sharply. half to reach $1.76, according to a recent report of the Workers’ Compensation Insurance Rating Board.

California premiums have been among the highest in the country, according to the latest state-by-state compilation by the Oregon Department of Consumer and Business Services, the recognized authority on such data. With California’s recent cuts, it’s now somewhere in the middle.

That’s good news for California employers, but it annoys medical providers who don’t like the previous review’s restrictions, as well as unions and labor attorneys, who think employers got the best of it. of the agreement.

Pressure has grown for another decade-long “reform,” but Governor Gavin Newsom has reportedly urged rival factions to cool it down until the effects of the COVID-19 pandemic are fully understood. The Insurance Rating Bureau says more than a quarter of a million claims for pandemic-related disabilities have been made, with more than half coming from the health and public safety sectors.

During the pandemic, the Legislature and Newsom issued special rules facilitate the application for benefitsand their effect on system finances is still being calculated.

Meanwhile, under pressure from unions, the legislature has rolled back some aspects of the latest systemic overhaul — particularly on what’s called “presumption.”

Some workers – such as police officers and firefighters – can claim benefits for specific illnesses and injuries without having to prove they are job-related, and the bills have expanded both the categories of workers and eligible types of disabilities.

For example, three years ago legislation said post-traumatic stress disorder is presumed to be related to the work of local police and firefighters, and this month Newsom signed a bill into law. extend this presumption to state firefighters and public safety agency dispatchers.

The proliferation of such bills increases the pressure for a new systemic overhaul, but the composition of the dominant coalition and the changes it will seek are still highly uncertain.

Cal Matters is a public interest journalism company committed to explaining how the California State Capitol works and why it matters.

Ryan H. Bowman