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GOOD START
Although the signing was mostly symbolic, it showed the industry that California will again be a place for employment to flourish. Good jobs (and the ability for employers to survive) is the only way that California can move ahead financially, pulling itself out of debt, funding necessary safety and social programs, servicing infrastructure and environmental needs. Worker's Comp reform was one of Governor Schwarzenegger’s most aggressive campaign promises. Give credit where credit is do. The governor was prepared to continue the fight for reform if reform was not passed by taking it to the people. Collecting over 1 million signatures, his ballot initiative qualified for the November election. Business and insurance interests funded the initiative. With overwhelming support, Governor Schwarzenegger imposed a deadline on the legislature for enactment. The legislature responded and the ballot initiative was withdrawn with the passage of this reform package. Worker's Compensation costs the California employer $29 billion per year. This staggering cost is only one reason business has left the state, but it is an important reason, and this reform will help rejuvenate the state’s economy. “Reform, overhauling the state’s Worker's Comp system, may save employers up to $7 Billion annually,” according to Reuters News Service. I will not go into the lengthy provisions of this legislation, but, in a nutshell, the comprise legislation will limit injured workers’ ability to choose their own doctor and will emphasize medical objectivity in determining who can receive permanent disability benefits. The one point that stands out in this writer's mind is apportionment - limiting injury, or the percentage of the injury, to that caused by a work related injury. The point is that legislation was passed and that in time there should be measurable, positive changes. I receive many calls each week requesting Worker’s Compensation quotes. With each quote, if I can even quote it, comes the same remark. “I thought that reform was passed.” It was, but we will not see the benefits of this new legislation for some time. The legislation reinvented Worker's Compensation, and many new and untried concepts have been introduced. Full impact may take years. Insurance Commissioner John Garamendi has stated, “that savings from the new legislation would be slow to materialize and that some aspects of the bill would take years to implement.” The major component is to bring insurance carriers back into the California marketplace. Insurance companies have to make money, it’s what they do, and without profit no reform would be complete. With profit comes competition, and competition breeds savings. As I have said in the past, with so many parts represented by attorneys, many parts will have to be tested through the courts. Unions, employee groups and the socialist movement will take this reform to task. Legislation will be challenged and only time will prove its worth. With the words of Governor Schwarzenegger, “Our state can now become, once again, the job-creating machine it once was. With meaningful Worker's Compensation reform, California is open for business.” Sounds good! If you have any comments or questions, Roland Enz can be reached through California Plus Insurance Service at 1-800-699-7101. |