Employee Relations 09/21/2013
Workers’ Comp Bill Signed into Law
Governor Brown on Tuesday signed Senate Bill 863, the workers’
compensation system reform measure intended to increase permanent
disability benefits for injured workers while decreasing
frictional systemic costs for employers through, among other
things, increased oversight over medical provider networks (MPNs)
and the establishment of an independent medical review system
(IMR) to decrease unnecessary litigation. The bill, supported by
CSAC, was negotiated behind closed doors for several months by
labor organizations and several large employers and enjoyed early
support from Governor Brown. A more detailed analysis can be
found here and
The Workers’ Compensation Insurance Rating Bureau (WCIRB) provided a cost savings analysis for SB 863 while the bill was still in the Legislature, which at first projected increased systemwide costs; WCIRB then updated its analysis to state that the reform measure would actually result in a growth in annual savings once the fee schedules included in the bill are actually created. This week, WCIRB announced that it will meet on September 21 to continue their evaluation of SB 863, concentrating specifically on the provisions regarding the elimination of the future earning capacity factor, the new regulations for MPNs and the IMR. That meeting will also include the finalization of an amended pure premium rate filing.
In late August, WCIRB proposed a 12.6 percent pure premium rate increase to the Department of Insurance (DOI), citing a $1 billion increase in workers’ compensation insurers’ loss and expense payments; it has since announced that it will provide an amended proposal to DOI once it has completed its evaluation of the impacts of SB 863. CSAC will keep you apprised of further developments.
The Department of Industrial Relations must now adopt regulations to implement SB 863, a process in which CSAC expects to be involved.