Assembly Passes Workers’ Compensation Changes

The state Assembly approved a series of changes to California’s workers’ compensation system Friday, voting on a 170-page bill that arose in the final days of the legislative session.

The changes were sought by some business groups concerned about escalating insurance costs and labor unions that have been working for years to regain benefits that were eroded in a 2004 overhaul of the system.

The Assembly approved SenateBill 863 on a 68-4 vote on the last day of the two-year legislative session. The Senate has until midnight to act on the bill, which makes substantial changes to the century-old system that provides medical care and compensation to workers who injure themselves or fall ill on the job.

The bill would change the way benefits are calculated for injured workers and eliminate coverage for conditions that most commonly lead to lawsuits, including insomnia and mental health problems. Assemblyman Jose Solorio, D-Santa Ana, said the bill would lead to a more functional system for all parties.

“It’s an all-out assault on waste, fraud and abuse,” he said. “It provides consistency and certainty in the system.”

Lawyers representing certain classes of injured workers said the changes could have unintended consequences that would fall on the shoulders of the disabled. A handful of lawmakers said they would not vote on the bill, which emerged about three weeks ago, because they did not know what it contained.

“I can’t take a vote on something I can’t explain,” said Assemblyman Ben Hueso, D-San Diego.

Republican Assemblyman Curt Hagman, of Chino Hills, dismissed the procedural concerns.

“This is an instance where the process worked, where the people who are involved with this both support this bill,” he said.

Supporters said the reforms will increase compensation for disabled workers by $700 million a year, boosting benefits by an average of 30 percent for individual disabled workers. The annual savings that could result from the reforms are in dispute. Estimates range from $1 billion to less than one-tenth of that.

The rising costs associated with worker claims could force insurers to hike premiums by more than 10 percent next year, according to some estimates. That could force some businesses to lay off workers.

On Friday morning, Gov. Jerry Brown took the rare step of urging lawmakers to approve the bill.

He said the legislation was needed to “avert an imminent crisis where workers suffer and rates will skyrocket.”

Supporters say the legislation could reduce rates by as much as 7 percent by slowing the upward climb of medical and legal costs.

The bill addresses changes pushed in 2004 by then-Gov. Arnold Schwarzenegger that dramatically reduced benefits for permanently injured workers.

Labor and business advocates, as well as lobbyists for lawyers, insurers and physicians, worked feverishly in the final days of this year’s session to strike a deal. Supporters include the California Chamber of Commerce and the California Labor Federation.

Several lawmakers said they did not know exactly what the bill contained.

Assemblyman Roger Dickinson, D-Sacramento, acknowledged concerns about how the reforms would affect workers and officials who process claims but said that the good the bill did outweighed the possible harm. He added that the Legislature would likely revisit the issue with more fix-it bills in the coming years.