The progressive era of California government a century ago spawned many innovative reforms, among them a “grand compromise” between the state’s workers and their employers.
Under “workers’ compensation,” enacted in 1914, workers would give up their right to sue employers for injuries and in return, employers would be obligated to pay for medical care and provide cash benefits while disabled employees recuperated.
Today, work comp, as it’s dubbed, is a huge program – well over $20 billion a year – whose operating rules are a source of perennial political jousting.
Five major stakeholder groups – employers, insurers, labor unions, medical care providers and lawyers who specialize in work comp cases – maneuver incessantly behind the scenes. About once a decade, several of the big interests agree among themselves on rules changes and get the Legislature and the governor to enact them.
Usually, what’s called “reform” involves financial gains for its sponsors and financial hits on those left out of the deal. It last happened in 2012 when employers and unions, with the tacit approval of work comp insurers, agreed to raise cash benefits and pay for them by tightening medical care and rehabilitation services. It angered medical providers and lawyers, of course, but followup studies indicate it’s done what it was supposed to do.
However, it still left California employers with – by far – the nation’s highest work comp burden. The 2016 annual survey of costs by the Oregon Department of Consumer and Business Services kept California in the No. 1 spot with an average cost of 3.24 percent of payroll for work comp insurance, 76 percent above the national average.
View Article