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Are prospects for major California work comp proposal fading after release of WCIRB report?

In an update to an important workers' compensation defense story, state lawmakers are now actively considering whether to pass a sizeable bill calling for major work comp reform in the remaining week of the legislative session.

On Monday, Senate Bill 863 was officially introduced to state lawmakers. Sponsored by Sen. Kevin DeLeon (D-Los Angeles) and Sen. Jose Solario (D-Anaheim), SB 863 is largely the product of ongoing negotiations between labor groups and a collection of large, self-insured employers who began gathering last October.

The 170-page bill calls for around $700 million in additional permanent disability benefits to be awarded to injured workers and roughly $1.4 billion in savings for the state work comp system.

Thus far, SB 863 is not generating much enthusiasm in Sacramento, where state legislators -- seemingly left out of the negotiations until late in the process -- are questioning whether there is enough time left in the session to carefully vet the bill.

In addition, a report released Monday by the Workers' Compensation Insurance Rating Bureau likely did little to improve its prospects of passing.

The WCIRB report indicates that the $700 million in additional permanent disability benefits would only be offset by roughly $400 million in cost reductions, meaning that work comp costs would increase by nearly $300 million a year under the bill.

Department of Industrial Relations Director Christine Baker, who was rumored to be a participant in the negotiations and has gone on record as supporting the legislation, indicated that the bill could be amended over the next few days to remedy any potential monetary issues.

"WCIRB data is now available and is being released to advise the public of information pertaining to costs and savings through a proposal to bring comprehensive reform California's workers' compensation," said Baker. "While this information is being made publically available, reform discussions continue in an effort to find the best solution to protect employees while preventing increases in the cost of doing business in the state."

Stay tuned for further developments on this important workers' compensation defense law story ...

This post was provided for informational purposes only and is not to be construed as legal advice.

Sources:

Insurance Journal, "Study: Workers' comp reform bill increases costs $300M," Don Jergler, August 27, 2012

Insurance Journal, "Calif. workers' comp deal gains support of government," Don Jergler, August 17, 2012

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