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(USGovernment-News.Com, November 22, 2012 ) Norco, CA -- The California workers compensation Institute issued a report earlier this week that shows a significant increase in workers’ compexpense payments for 2011 over the previous year. Nearly $12.5 billion dollars was paid out in 2011, which was over $1.2 billion more than the 2010 payout.
The breakdown of the nearly $1.3 billion increase is as follows:
Loss Payments - $350 million (evenly split between indemnity and treatment payments)
Insurance Overhead - $265 million
Defense and Loss Adjustment Costs - $650 million
Medical Cost Containment - $27 million
Med Legal Costs - $5 million
The report comes as no surprise, as efforts to overhaul the failing system are in process, and the workers compensation insurance Rating Bureau of Californiahas recommended a 12.6% increase in premiums.
There are five major groups with a stake in the workers’ compensation system:
Employers
Unions
Insurers
Healthcare providers
Disability attorneys
The last time the system was reformed was in 2004. Governor Schwarzenegger, just newly inaugurated at the time, sided with employers and pressured legislators to tighten eligibility requirements for cash benefits.
The final reform saw a significant reduction in employer’s expenses and premiums, but medical providers and unions felt left out in the cold, and have been eagerly awaiting the opportunity for further reform. With a democratic governor in office and a sympathetic legislature, those who got the short end of the stick under the Schwarzenegger plan are actively seeking new reform.
There has been some criticism of the manner in which legislators are handling the reform process. According to accusations, the reform is taking place behind closed doors through back room deals with no input from the public.
There is a lot at stake for worker’s, who are at risk of losing some current California workers compensation insurance benefits under the reformed plan. One proposal, if passed, will disallow workers with physical injuries to claim any resulting psychological disability. This would result in a significant reduction in benefits for workers with debilitating injuries that prevent them from being able to work.
A worker’s compensation proposal that was worked out between self-insured employers and labor representatives is being considered for insertion into a bill. The 300-page proposal includes approval for an additional $700 million in permanent disability benefits, as well as a budget that will result in $1.4 billion in savings system wide.
Insurers were not in on the negotiations, and legislators seem to be the last ones invited to the party. The proposal is reportedly backed by the Department of Industrial Relations and has the governor’s endorsement as well. Some lawmakers have expressed concern that, as there are only two weeks left in the legislative session, there will not be adequate time to read over and discuss the lengthy proposal.
To complicate matters, there are allegedly several versions of the 300-page proposal that must be reviewed and considered. For more information on California workers compensation benefits please visit http://bestworkercomprates.com/
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