Expected veto not the end of push to increase benefits

California Highway Patrol Officer Gary Hoag was investigating an accident on Interstate 5 near San Clemente when an approaching car spun out of control and pinned the veteran cop between the wrecked vehicles.

His left leg was nearly severed, his spine was injured and his 29-year law enforcement career ended on Jan. 10, 2005. “Every step I take is extremely painful, which has greatly reduced the quality of the rest of my life,” Hoag, 52, says.

And to make matters worse, Hoag complains that, because of a 2004 overhaul of California’s workers’ compensation insurance system, his permanent disability benefits are likely to be cut 60% to a lifetime total of $45,000 by the time his case is settled. “It’s nowhere near enough,” he says.

Hoag and advocates for permanently injured workers, whose benefits have dropped by as much as 70% over the last three years, came to the state Capitol on Wednesday to urge Gov. Arnold Schwarzenegger to sign a bill that would boost future benefits.

Business groups, led by the California Chamber of Commerce and the state manufacturers association, want a veto, and the governor is likely to do just that. He killed a nearly identical measure by Senate President Pro Tem Don Perata (D-Alameda) a year ago. This year’s bill, like last year’s, would have doubled current permanent disability benefits over three years.

Employer groups contend that Perata’s bill, SB 936, “is not based on reliable data.” The groups say they are nervous about doing anything that might push up workers’ compensation insurance premiums, which plunged 55% from a high in late 2003, saving them more than $9 billion.

But the governor’s expected veto doesn’t mean the administration isn’t beginning to realize that the 2004 law may have gone too far in cutting benefits.

“We expect the governor to veto it, but hopefully it will spur some administration action to fix permanent disability,” says Angie Wei, a lobbyist with the California Labor Federation involved in the negotiations.

Meanwhile, an executive for a major insurance company telegraphed that he and other insurers could back an increase of up to 30%. “I think there’s a feeling that the downward adjustment in permanent disability ratings has been more severe than we anticipated, than we intended,” says Mark Webb, a vice president for government relations of Employers Direct Insurance Co. of Agoura Hills.

“It definitely needs a little tweaking,” says Carrie Nevans, acting administrative director of California’s Division of Workers’ Compensation. Nevans is meeting regularly with an advisory group that includes Wei, Webb and representatives of insurers, employers and lawyers for injured workers.

Nevans, so far, is considering regulatory changes that could increase permanent disability benefits by about 10%. She says that a series of studies back the need for at least a small increase in benefits, but more data might be needed before considering further increases.

A spokesman for the governor, Aaron McLear, says the administration is following Nevans’ informal talks and “will take a look to see if regulatory changes are needed to ensure truly injured workers are fairly compensated.”

But 18 months of detailed studies by state economists confirm that injured workers are being hit disproportionately hard by reduced benefits, while employers’ insurance bills have been halved and insurers reap their largest profits in decades, says Sue Borg, president of the California Applicants’ Attorneys Assn. The group’s members represent injured employees in the state’s special workers’ compensation courts.

Another attorney, Linda Atcherley, says she hopes the talks with Nevans and, eventually, the governor’s office will bring more than minimal relief to her clients. “Anything helps. I’m not willing to say that 10% is nothing,” she says. “But in the grand scheme of things, it’s nonsense.”

marc.lifsher@latimes.com