Workers’ comp savings in sight |

Workers’ comp savings in sight

The savings promised in the new workers’ compensation law will be evident by next year, a top aide to the legislation’s chief sponsor told a breakfast meeting of the Nevada County Economic Resource Council Tuesday.

Deborah Gonzalez, chief of staff to state Sen. Charles Poochigian (R-Fresno), said many of the savings won’t kick in until regulations currently being drafted take effect Jan. 1.

Poochigian was the lead sponsor of SB 899, which was signed into law by Gov. Arnold Schwarzenegger in April amid promises of savings in workers’ comp insurance rates approaching 20 percent a year.

Gonzalez pointed out the new law resulted in a decrease of 10 percent in insurance rates this year, a big turnaround from the projected increase of 12 percent before the legislation passed.

“It is a sign that the system is starting to change,” she said.

But she added many of the significant reforms contained in the legislation won’t take effect until next year, including the creation of employer doctor pools, implementation of nationally recognized standards of care, and a new formula for determining an injured worker’s level of disability.

Gonzalez said the legislation was designed to fix four major problems in the workers’ comp system:

• Universal eligibility for workers’ comp, regardless of the source of the injury;

• High average cost of medical claims: $35,000 in California vs. $15,000 nationally;

• The “irrational” system for determining long-term disability payments;

• The worst return-to-work ratio in the nation.

She said high insurance rates have been caused in part by the lack of competition for the business, a situation the new legislation should change. “Stability will bring more insurance companies back into the market,” she said. “I really think this bill will improve care.”

Two other pieces of workers’ comp reform are still before the state legislature this year: A crackdown on fraud, and a bill permitting small businesses to self-insure by banding together.

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