California’s Work Comp Poster Child
By Robert Warne - August 29, 2003 Before entering into a second round of talks with the Conference Committee on Workers’ Compensation Reform, Aug. 27, Insurance Commissioner John Garamendi and an array of business leaders showcased their work comp rage to the press.
Jim Sinegal, CEO & President of Costco Wholesale, Inc. said that because the bulk of the money associated with a claim goes to the participants not the injured workers, the current system is corrupt.
He said his company wasn’t going to tolerate it any longer and that they were prepared to start circulating petitions to store members to push for Garamendi’s proposed reforms.
Bill Zachary, Safeway’s vice president of Workers’ Compensation said that even though only 31 percent of its business is in California, 67 percent of its work comp costs can be attributed to the state.
He called for a change in disability rating. He explained that there are too many inconsistencies in how employees with the same jobs and same injuries are rated.
Jack Stuart who is involved with manufacturing in the state called work comp the poster child for all the high costs of doing business in California.
Garamendi put the urgent need for reform in perspective when he said medical and legal costs are on an escalator that just keeps on going up. If comprehensive reforms don’t take effect Jan. 1, 2004, the window of opportunity to implement change will close for another year.
He said as it stands right now there are only two options on the table. Either State Fund can raise its rates or the system can be reformed.
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