Healing workers' comp: a primer on what the reforms mean for businesses.

• Author: Zaremberg, Allan

California's weathered workers' compensation system has been a top issue for California employers in recent years. The state has seen some of the highest workers' comp premiums in the nation--costs that have skyrocketed 136 percent on average in just the past four years. Employers have cited the high cost of workers' comp insurance as a major reason for stagnating job growth and moving operations out of California.

[ILLUSTRATION OMITTED]

When Gov. Schwarzenegger took office, workers' comp reform was a key part of his agenda. Bringing together employers and labor. Democrats and Republicans, a deal was reached--Senate Bill 899--that purports to bring employers some relief, while ensuring that California's severely injured workers receive the benefits they deserve.

While it's still too early to say how much money will be saved--and how far workers' comp premiums will fall--estimates from lawmakers have indicated the overhaul could trim $4 billion to $6 billion from the nearly $18 billion system by imposing stricter limits on medical benefits, setting a higher standard of proof for workers claiming to be injured, and requiring employees to use doctors approved by their employers and their insurance companies.

The bill addresses such issues as rising medical and disability costs, subjective standards and excessive litigation, all of which have contributed to increased workers' comp costs.

With some exceptions, the changes affect all pending claims, but do not require revising or reopening any past decisions.

INSIDE SB 899

Reforms contained in SB 899 will change the system for determining the level of injury and amount of disability assigned to that injury.

Key points include:

Reporting

* Requires that disability reports be based on the standards from the American Medical Association Guides to the Evaluation of Permanent Impairment, 5th Edition and that the disability schedule be objective and consistent.

[ILLUSTRATION OMITTED]

* Requires an employer/insurer to authorize medical treatment within one day of receiving an occupational injury claim, even though the claim may be delayed for up to 90 days for investigation. Limits liability for pre-acceptance medical treatment at $10,000.

* Requires that the causes of an injury or illness be classified as either work related or not work related for the purposes of determining disability. Requires doctors to address this issue in medical reports.

* Ensures that employers are only responsible for the...