Benefit Increase: Will it Happen this Time?
By Robert Warne - February 1, 2002At the Workers’ Comp Benefits Ball Jan. 31, business groups and their dates the employers were the wallflowers as Gov. Gray Davis, Democratic lawmakers, labor leaders and applicant attorneys danced the night away. Now after three failed attempts by lawmakers to secure a benefits increase the election year environment has produced a bill that the governor will sign.
Although the bill has its opponents, many have long agreed it is time to raise the benefits paid out to injured workers. Adjusters have told adjustercom.com that a benefits increase would only affect a small portion of their current caseloads.
Still the Workers’ Compensation Insurance Rating Bureau is concerned that with benefits rising in 2003 from $490 a week to $602 and climbing to $840 in 2005 that there will be a surge in employees taking advantage of the system. They, along with insurance industry lobbyists, believe that the cost-saving numbers being touted by backers of the legislation are overestimated and the actual costs to employers is underestimated.
Backers of the legislation have estimated the price tag to employers to be in the neighborhood of $2.4 billion. They are optimistic that a few nuggets of reform will translate into approximately $1.6 billion in savings to employers.
Eliminating the presumptive of correctness for the treating physician is one area that is welcomed by insurers and employers alike, and is expected to reduce overall costs. The introduction of a government subsidy to be paid to employers who get injured workers back on the job sooner is another cost-saving incentive. The utilization of managed care and the implementation of an official fee schedule is expected to reduce medical costs accounting for 53 percent of the money spent on workers’ compensation.
Davis vetoed a benefit increase bill each year he’s been in office, angering labor unions, his strongest supporters. Following his veto of last year’s increase bill, labor unions threatened to push two ballot measures in November 2002.
According to the San Francisco Chronicle, Senate President Pro Tem John Burton (D-San Francisco) helped Davis face the reality of the potential loss of union money that would go towards the passage of the measures and not towards Democratic candidates.
With Assemblyman Tom Calderon (D-Montebello) carrying the bill through the House and Burton carrying it through the Senate the bill is expected to reach Davis’ desk next week.
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