Jason Schmelzer CCWC Legislative Advocate has prepared and circulated an excellent forecast of the workers’ compensation isssues likely to be raised this year by the California legislature.

The California State Legislature returned to Sacramento on January 4 to complete the remainder of the 2015-2016 legislative session. California’s workers’ compensation system hasn’t been a major focus for the legislature for the last few years. The Division of Workers’ Compensation, however, has been busy promulgating regulations to implement SB 863, and the legislature and governor have stayed focused on other issues like climate change, transportation infrastructure, the drought, and affordable housing.

The first order of business for the legislature was to deal with the bills remaining from 2015, which are still eligible for consideration in the early weeks of 2016. One bill, in particular, that CCWC opposed aggressively in 2015 was SB 563 by Senator Richard Pan (D-Sacramento). Previous versions of the bill sought to place significant roadblocks in front of employers seeking to perform legitimate utilization review. However, recent amendments narrow the scope of the bill to simply prohibit UR contracts with a payment structure that specifically incentivizes delays, denials, and/or modifications of treatment requests. While there are some small details to be worked out, it appears that most of the concerns with this bill have now been resolved.

This is likely to be a year in which the stakeholders once again engage with seriousness. The reforms contained in SB 863 have finally been implemented and, as a result, workers’ compensation costs for employers have essentially stabilized. Benefits for injured workers are once again considered “adequate” after SB 863 increased permanent disability benefits by approximately $1 billion per year. The data, although preliminary, indicates that SB 863 has done what it was intended to do – augment benefits and slow or stop the growth in employer costs.

SB 863 is over three years old, and stakeholders are realizing that maintenance needs to occur if the system is to stay in balance. With three years of experience under SB 863 and plenty of data to drive discussions it seems likely that policymakers will attempt to smooth out whatever rough edges remain with recent reforms; and maybe even tackle some of the big issues that still remain. Additionally, stakeholders are getting itchy. Governor Brown has taken a cautious approach to workers’ compensation legislation since signing SB 863 in 2012. The result has been a lack of progress on priority legislation for many stakeholders that are pursuing changes as a direct result of SB 863, or weren’t involved in the negotiations and have priorities that predate SB 863.

It is unclear whether the conditions exist to tackle the big issues in 2016 – cumulative trauma reform, utilization review frequency, and myriad other issues from every corner of the stakeholder world. CCWC continues to watch the situation and work with the legislature, administration, and stakeholders to develop a strategy to move beyond the accomplishments of SB 863 and lower employer costs in what is still, at last evaluation, the most expensive venue for workers’ compensation in the nation.

The legislature, however, may have other ideas. The first new workers’ compensation bill of the year, SB 897 by Senator Richard Roth (D-Riverside), would unquestionably increase costs considerably for cities, counties, and the state. Labor Code Section 4850 provides for one year of full salary replacement, in lieu of temporary disability, for certain law enforcement personnel and firefighters. This provision is a source of great expense for local governments and the state, and SB 897 would double the duration to two years.