Contributor

John Campbell

John Campbell (R-Irvine) is an Assemblyman representing the 70th District in Orange County. Mr. Campbell is the Vice-Chairman of the Assembly Budget Committee. He is the only CPA in the California State legislature and recently received a national award as Freshman Republican Legislator of the Year. He represents the cities of Newport Beach, Laguna Beach, Irvine, Costa Mesa, Tustin, Aliso Viejo, Laguna Woods and Lake Forest. He can be reached through his Assembly website and through the website for his California Senate campaign. [go to Campbell index]

Worker's Comp... Details
Some of the particulars...
[John Campbell] 4/19/04

Worker's Compensation Update: Today, the negotiated worker's comp reform package that I talked about yesterday passed both houses of the legislature and will be signed by the governor. The vote was 77-3 in the Assembly and 33-3 in the Senate. All the No votes were cast by Democrats. The Governor is expected to sign the legislation in a ceremony on Monday.

The good news is that it all takes effect immediately after the Governor signs it and the reforms meet the threshold of substantial. Here's what you can expect now:

• The bill takes effect immediately which means that it's provisions will begin to affect new claims filed next week. It may even stop the filing of some claims because they will be less lucrative for lawyers and others now.
• Premiums should begin to drop (if your loss ratios are not up) with your next renewal, whenever that is. Some estimates are that the bill should lower premiums by about 25-30%. But this is an estimate, and it may take more than a year for all the reforms to have there full effect on the system. It is expected that insurers who had left this market will come back in thereby giving you more choice and competition at renewal time.
• The bill is 200 pages long and very complicated. But it has lots of opportunities for businesses to better manage claims and reduce losses if those businesses take action. You should get with your consultants in this area right away to begin taking some of those actions. For example, employers can control the medical providers for injured workers if they set up a pool from which the worker can choose. Companies need to get those pools established so you can keep people out of the fraudulent worker's comp "mills" that people can go to now.
• If your company is self-insured, you do not have to wait for rates to go down and should see savings immediately, or as soon as you implement some of the bills provisions.
• 60% of the market for worker's comp is controlled by the State Worker's Compensation Insurance Fund which is an arm of state government. The governor will expect them to react quickly to improve rates and competition in the market.
• There is more that the governor can and will do administratively to improve the Fund described above and the appeals and court processes.
• There is more that can be done after the effects of this bill are seen. After 5 years of annual premium increases, we are hopefully beginning a period of several years of decreases.
• This is the best that could be achieved with Democrats in charge of the legislature. If you want even more reform and more reductions, we need to elect more Republicans in November.
• The initiative scheduled for the November ballot will not go forward now. That means that resources that otherwise would have gone to worker's comp will likely now go to the referendum to repeal the terrible mandatory state health insurance bill (SB2).
• If I were to summarize 200 pages of law in 2 sentences, I would say that the bill puts controls on the use of and cost of medical providers to objective standards in an employee pool. Secondly, it makes it much harder to claim partial or temporary disability and reduces the awards except in the more severe cases.

So there you have it. Our work is not done. We will need to do more reform next year. But, thanks to Arnold Schwarzenegger, Republican leadership and an initiative, we have begun to lower the cost of doing business in and creating jobs in California for the first time in over 5 years.

Now, on to balancing the budget, lowering energy costs and tort reform. CRO

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