On August 9, 2013, the WCIRB submitted its January 1, 2014 Regulatory Filing to the California Department of Insurance proposing changes to the Insurance Commissioner’s regulations contained in the California Workers’ Compensation Uniform Statistical Reporting Plan – 1995  (USRP), the California Workers’ Compensation Experience Rating Plan – 1995  (ERP), and the Miscellaneous Regulations for the Recording and Reporting of Data–1995  (Misc. Regs.). The Insurance Commissioner held a public hearing on September 30, 2013 to consider the proposed changes.

On October 17, 2013, the Commissioner issued a Decision approving all of the WCIRB’s proposed changes as filed. Among these changes approved effective January 1, 2014 are:

• ;Numerous changes to the Standard Classification System contained in Part 3 of the USRP
• Changes to data reporting requirements to conform to national data reporting specifications
• Amendments to the audit rules to allow for the use of collective bargaining agreements to validate an employee’s hourly wage rate for dual wage classification assignment purposes
• Amendments to facilitate the bifurcation of pure premium rate filings and regulatory filings

In addition, the Commissioner approved a number of regulatory changes to be effective on January 1, 2015 including amendments to the USRP pertaining to policy reporting requirements and significant amendments to the ERP limiting the impact on an employer’s experience modification of a single claim incurred during the experience period to 25 points.

The Commissioner’s Decision pertains only to the WCIRB’s January 1, 2014 Regulatory Filing and does not address the WCIRB’s January 1, 2014 Pure Premium Rate Filing which contains proposed changes to pure premium rates for 2014. The Commissioner has scheduled a public hearing regarding January 1, 2014 pure premium rates for October 28, 2013. See related story, Hearing Date Set for January 1, 2014 Pure Premium Rate Filing.

The WCIRB cannot issue experience modification for policies incepting January 1, 2014 and beyond until the Commissioner issues a Decision with respect to the pure premium rate filing.

The WCIRB is currently updating the USRP, ERP and Misc. Regs. to reflect the Commissioner’s Decision. Once completed, copies of these documents will be posted to the Publications and Filings section of www.wcirb.com. In the interim, the WCIRB has created the Quick Reference Guide 2014 summarizing the approved changes to the regulations.

Swiss customs agents have seized one million fake tablets of anti-anxiety drug Xanax at the Zurich airport,authorities said on Friday. “Counterfeit medicine is one which is deliberately and fraudulently mislabeled with respect to identity and/or source,” states the World Health Organization (WHO). “Counterfeiting can apply to both branded and generic products and counterfeit products may include products with the correct ingredients or with the wrong ingredients, without active ingredients, with insufficient active ingredients or with fake packaging.”

The counterfeit tablets, packed in four crates and weighing 400kg, had originated in China, according to Swissmedic, the Swiss Agency for Therapeutic Products. “Analyses in the Swissmedic laboratory revealed that the drugs, which are prescribed to treat symptoms of acute anxiety, contained no active ingredients whatsoever,” Swissmedic said in a statement. The Swiss regulator said in June that it had already seized about 90 shipments this year representing a high-potential health risk. It also has ordered the shutdown of Internet websites trading drugs illegally. “According to experts, the drugs would be unrecognisable as counterfeits at a first glance.” Xanax is a drug manufactured by Pfizer used to treat severe anxiety or panic disorder. The fake tablets were destroyed.

Developing countries are a massive market for counterfeit medications, a massive trade worth billions of dollars that is often deadly. According to the WHO, fake drugs range from antibiotics to birth-control medicines, anti-tetanus serums, antimalarials, organ transplant drugs, heart disease and diabetes. In parts of Asia, Africa and Latin America, fraudulent medicines are thought to amount to as much as 30 per cent of the market, according to the UN drug agency.

Also making up a large part of medicines sold online, fake medicines can contain the wrong dose of active ingredients or toxic substances such as rat poison, according to the UN drug agency.

Back in July 2012, Chinese police seized $182 million worth of counterfeit medicine in one month during a countrywide sweep. Drugs found during the seizure included medication for diabetes, high blood pressure, and even rabies. Unlike drugs found at the Zurich airport, most of the medication did contain harmful substances.

Governments are fighting to safeguard the distribution of legitimate drugs and crack down on counterfeit products. Systematic checks of medical shipments are carried out every year, and imports of bogus medicines have been declining in Switzerland, Swissmedic said in June. Counterfeit drugs generated an estimated $75 billion in revenue in 2010, according to the National Association of Boards of Pharmacy. Each year more than 100,000 people around the world may die from substandard and counterfeit medications, according to an estimate by Amir Attaran, an associate professor at the University of Ottawa, and Roger Bate, an economist at the American Enterprise Institute.

The United States has a growing problem with counterfeit drugs. In 2012, tainted steroids killed 11 people near Boston and sickened another 100. In another case, vials of the cancer medicine Avastin were found to contain no active ingredients. The vials were sourced in Turkey, shipped to Switzerland, then Denmark, finally to the United Kingdom from which they were exported to U.S. wholesale distributors. The Wall Street Journal reported that the U.S. wholesale distributor was hired by Canada Drugs, which also owns CanadaDrugs.com, a retail pharmacy website that sells prescription medication internationally, with a focus on the American market.

In 2007-08, 149 Americans died from a contaminated blood thinner called Heparin that was legally imported into the United States. Investigated by the FDA Office of Criminal Investigations, the Albers Medical investigation is the most prolific example to date.

On August 21, 2005, the U.S. Attorney’s Office for the Western District of Missouri issued a press release announcing that three businesses and eleven individuals were indicted for their involvement in a $42 million conspiracy to sell counterfeit, smuggled and misbranded Lipitor and other drugs and for participating in a conspiracy to sell stolen drugs. As part of this investigation, FDA initiated a recall of more than 18 million Lipitor tablets, which ranks as the largest recall in the history of criminal investigations of counterfeit medications. Participants in this scheme conspired to purchase and sell counterfeit, misbranded and illegally imported drugs. Foreign versions of Lipitor and Celebrex were smuggled into the U.S. from South America and re-sold after being re-packaged to conceal the true origin of the drugs. Counterfeit Lipitor also was manufactured in South America and then smuggled into the U.S. where it was co-mingled with the genuine foreign Lipitor and sold in the U.S.

In addition, participants conspired to buy, sell and traffic almost eight million dollars worth of stolen Glaxo Smith Kline and Roche drugs, using fake pedigrees to launder the drugs and thereby concealing that they were stolen. There also were charges related to the sale of counterfeit Procrit, as well as counterfeit and misbranded Serostim and Neupogen. Procrit is an injectable drug used in the treatment of anemia and Neupogen is an injectable drug used by cancer patients to stimulate the production of white blood cells in order to decrease the incidence of infections.

The City of Sierra Madre hires and fires volunteer firefighters, sets the rules and regulations for their work, requires them to work specific shifts and to arrive on time, and requires them to report to supervisors and to work within the framework of the Sierra Madre Fire Department (SMFD). Volunteer firefighters also receive training and are covered by workers’ compensation. The City keeps records of the volunteer firefighters’ service. It pays volunteer firefighters a stipend of $1 per day, paid every 90 days. It also pays voluntary firefighters approximately $33 per day when “hired out” with a SMFD strike team of firefighters sent to assist other agencies in fighting non-local large-scale fires. None of that was enough to make a volunteer firefighter an employee for DFEC discrimination claims according to a new case from the Court of Appeal.

In 2007 Kaylin Enriquez applied for a position as a firefighter for the SMFD, after completing her firefighter training. She was appointed to work as a probationary volunteer firefighter. After learning that she had been accepted to the training program she resigned from her other job with FirstMed Ambulance. Enriquez eventually completed her probationary period as a volunteer firefighter. On April 10, 2008 Enriquez began the background check procedure required for employment by the Sierra Madre Police Department (SMPD).

Meanwhile, Enriquez had witnessed incidents that several firefighters in the SMFD claimed involved sexual harassment. Enriquez then received a phone call from SMPD Chief Marilyn Diaz, who stated the police department was putting Enriquez’s employment on hold pending resolution of issues regarding Enriquez’s status with the SMFD.

On August 2, 2008 the SMFD issued Enriquez a disciplinary notice that wrongly accused her of ignoring an admonishment not to discuss her interview or the investigation with anyone but her “authorized representative.” The notice stated that she had created an uncomfortable working environment by discussing the incidents with City staff. The notice stated that Enriquez was “[d]ishonest, [d]isobedient; [took a]ctions that adversely affected the safety of employees or others; . . . [engaged in h]arassment of fellow employees; [and engaged in v]iolation of any city policy.” The City refused to remove the disciplinary notice after Enriquez explained inconsistencies and errors in the notice.

Enriquez’s prospective employment with the SMPD, originally scheduled to begin August 4, 2008, was postponed initially for six months and then indefinitely. The SMPD ultimately withdrew its employment offer “as a result of the Disciplinary Notice and subsequent action.” At the end of 2009 Captain Kristine Lowe of the SMFD informed Enriquez via Facebook message that the SMFD was placing Enriquez on leave from her position as volunteer firefighter because she had not yet obtained her Emergency Medical Technician certification/accreditation (EMT certification). The EMT training requirement had not been enforced in the two years Enriquez had been a volunteer firefighter. Enriquez attempted to enroll in the first available EMT training course upon learning of the certification requirement, but all of the classes were full and there was no waiting list.

Enriguez filed a civil action with 22 causes of action. As to the employment-related causes of action (causes of action 1-20 and 22), the City argued that Enriquez did not receive “significant remuneration” for her services and therefore was not an employee and could not state causes of action for employment discrimination. The trial court sustained a demurrer without leave to amend. The Court of Appeal affirmed the dismissal in the unpublished case of Enriquez v. City of Sierra Madre.

The key legal issue on appeal was whether the plaintiff was an employee and therefore protected from wrongful termination and employment discrimination under FEHA. To satisfy the hiring prong of the thirteen factors articulated by the Supreme Court in Community for Creative Non-Violence v. Reid [1989], a purported employee must establish the existence of remuneration, in some form, in exchange for work. Individuals who are not compensated for their services are not employees for purposes of discrimination statutes. Substantial indirect compensation can satisfy the threshold requirement of remuneration. This can include state-funded disability pension, . . . survivors’ benefits for dependents, . . . scholarships for dependents upon disability or death, . . . bestowal of a state flag to family upon death in the line of duty, . . . benefits under the Federal Public Safety Officers’ Benefits Act when on duty, . . . group life insurance, . . . tuition reimbursement for courses in emergency medical and fire service techniques, . . . coverage under a Workers Compensation Act, . . . tax-exemptions for unreimbursed travel expenses, . . . ability to purchase, without paying extra fees, a special commemorative registration plate for private vehicles, . . . and access to a method by which [the volunteer firefighter] may obtain certification as a paramedic.

Enriquez argued that her receipt of workers’ compensation benefits was sufficient to give her employee status. The Court of Appeal decided that this was not enough. Enriquez did not receive any retirement, health care, insurance, tuition reimbursement or other similar benefits that would support a finding that she was an employee. The court in Estrada v. City of Los Angeles (2013) 218 Cal.App.4th 143, which involved a volunteer reserve police officer, recently rejected the argument that receipt of workers’ compensation benefits alone confers employee status in a DFEH claim.

The Division of Workers’ Compensation (DWC) is now accepting nominations for its annual Carrie Nevans Community Service Awards which will be presented during the luncheons at the 21st annual educational conferences in February 2014. The awards, which began in 2010, were renamed in memory and honor of Carrie Nevans, the acting administrative director who passed away in 2011.

“This award acknowledges those MVPs who go above and beyond to benefit the comp system for the betterment of employees and employers,” said Department of Industrial Relations (DIR) Director Christine Baker. DWC is a division of DIR.

Nominations should be made for those individuals who have made a significant contribution to the betterment of the workers’ compensation community in the highest professional manner. DWC will evaluate the nominations and honor one Southern California recipient in Los Angeles and another Northern California recipient in Oakland during an award ceremony at the educational conferences.

Those who make a nomination should complete the attached DWC nomination form and send to Wendy So at wso@dir.ca.gov no later than January 10, 2014.

Last year’s award in Northern California was given to Angie Wei, Legislative Director of the California Federation of Labor, AFL-CIO. Sean McNally, president of KBA Engineering in Bakersfield was the Southern California recipient. Both were commissioners with the Commission on Health and Safety and Workers’ Compensation. The awards were presented at the 20th annual DWC educational conference luncheons.

Existing law specifies the time period within which various proceedings may be commenced under provisions of law relating to workers’ compensation. With certain exceptions, a proceeding to collect death benefits is required to be commenced within one year from the date of death or, in some cases, from the last furnishing of benefits. However, no proceedings for death benefits may be commenced more than 240 weeks from the date of injury.

AB 1373 would have provided that certain proceedings related to the collection of death benefits of firefighters and peace officers may be commenced within, but no later than, 480 weeks from the date of injury and in no event more than one year after the date of death if all of the specified criteria are met, including, but not limited to, that the employee’s death is the result of a specified injury.

According to the author, and the sponsor the California Professional Firefighters, there are cases where current law they say “unfairly harms” the dependents of fallen public safety officers. In circumstances where a safety officer dies more than 240 weeks after a diagnosis of the condition that causes death, current law does not provide benefits for surviving dependents. However, there are conditions where survival for more than 240 weeks after diagnosis is not uncommon, notably a cancer that goes temporarily into remission, or a blood-borne disease that results in a debilitating but long, slow decline.

A number of public agencies opposed the bill primarily on the basis of increased costs as well as the uncertainty of the as-yet unspecified time period. These agencies believe that the workers’ compensation benefits available to public safety officers are already sufficiently generous, and local governments are simply not in the position to incur new financial obligations.

Last year the legislature passed AB 2451 which also proposed to extend the statute of limitations in presumption cases. AB 2451 was significantly broader in at least 2 respects: it also applied to death resulting from heart conditions, and it did not limit the cases where the extended limitations period applied to those where the date of injury was during active employment. Rather, AB 2451 would have applied regardless of when the condition arose, resulting in significantly more uncertainty, and significantly more cases, than AB 1373 will apply to. Governor Brown vetoed AB 2451 last year.

And he also vetoed AB 1373 passed by the legislature this year. His veto message said “This measure is identical to the one I vetoed last year. At that time, I outlined the information needed to properly evaluate the implications of this bill. I have not yet received that information.”