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Serious Progress Is Really Happening With California Work Comp Negotiations
By John Franklin - March 26, 2004

Serious progress is happening in the negotiations over Workers' Comp in California.  Sen. Richard Alarcon (D-Sylmar) stated Wednesday that he estimated talks towards reaching a compromise between Governor Arnold Schwarzenegger, labor groups, and the mostly democratic lawmakers were "well over 90%" completed. 

The design of this agreement is to shave off billions of dollars a year from the premiums paid by employers for Workers' Compensation Insurance in California.  Sources close to the negotiators said the proposed reforms were to include at least three cost saving elements:

  • New methods for determining financial benefits for injured workers who have suffered permanent, partial disabilities. 
  • A faster process for getting people back on the job after injuries and accidents.
  • Regulation of Workers' Compensation insurance rates to guarantee that lower costs generated by the reforms are passed on to employers and not kept as profits by insurance companies. 

Earlier in the negotiation days, both Schwarzenegger and John Garamendi, the Insurance Commissioner who is a Democrat, opposed calls for regulation.  Their big concern was that government intervention would scare insurers away from the California market. 

But Garamendi recently changed his mind and ordered his legal staff to draft a proposal that would give him power to set Workers' Compensation rates as he can with other insurance.  Garamendi then went over all the fine points of the draft with Schwarzenegger at a 47 minute sit-down meeting. 

Although the governor's office wouldn't confirm it, there was rumor that Schwarzenegger would be willing to support putting a ceiling on rates if it's part of a broader package. 

 
 

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