“Today I delivered on my promise to create real workers’ compensation reform,” said Governor Schwartzenegger.
“No longer will workers’ compensation be the poison of our economy. Our message to the rest of the country and the world is that California is open for business.” The California governor’s comments came after signing the workers compensation legislation on April 16, a centerpiece in his run for governor.
In a fresh political win, both houses passed the bill with little resistance. The state senate passed the bill 33-3, following the assembly’s approval of 77-3. The win is a major victory, not only for Schwartzenegger, but for businesses, non-profits and local governments as well.
Since 2000 these groups have been struggling and caving under the weight of insurance premiums double and triple those in preceding years. The rocketing rates have put a huge damper on business in California, crippling many smaller operations and ejecting many others to surrounding states.
What has been called by some as an ambitious document, the bill aims to please both the businesses paying for the insurance and the workers receiving it. Though the Medical Network Provision will limit patients to a network of doctors approved by the business and its insurer, it also establishes an independent medical review process for patients who are unsatisfied with the care they are receiving.
Proponents of this provision claim that it will keep patients from doctor-hopping to find the most lucrative diagnosis.
A two years’ disability cap will limit disability payments, except in the case of injuries which take longer to heal, and a return-to-work program provides financial rewards to any company that makes extra attempts to provide employment for bringing employees back to their jobs following injury, also increasing the amount of money workers who are unable to return to work are able to receive.
The permanent disability provision creates a uniform scale on which injuries are compared, awarding more money to those whose rating is greater than 70 percent, with money that will no longer go to those whose injuries fall below the 15 percent level.
It also removes the overly subjective “work capacity guidelines” and replaces them with objective earning capacity ratings.The very complex and previously unprecedented apportionment provision prevents workers from receiving disability payments for portions of injuries which occurred outside of the workplace.
It also caps multiple awards so that an injured party cannot receive more than 100 percent disability for any part of the body.
Another provision that is obviously to the benefit of workers is the penalty provision which penalizes insurers for late payments of claims. Governor Schwartzenegger signed the bill on April 19, 2004 in Southern California.