State aid to injured workers may rise

Ever since California overhauled its troubled workers’ compensation insurance system in 2004, injured workers have complained that they were the big losers. That may be about to improve.

As part of the changes, disability payments were slashed by at least 50%, workers lost the right to choose their own physician and insurance adjusters often delayed and denied requests for medical treatments.

While injured employees saw benefits slip away, Gov. Arnold Schwarzenegger’s overhaul proved a boon for employers and insurers.

Premiums for legally required workers’ comp coverage plummeted by 60%, while insurance company profits soared to their highest levels in three decades.

For the last two years, the Legislature passed bills to increase benefits for workers, and each year the governor vetoed the bill. But this year it appears that a modest increase in benefits for disabled workers is in the works.

The governor, backed with research compiled by his workers’ compensation experts, may be ready to give disabled workers an increase in benefits of 16% and possibly more.

“The governor always said he was open” to increasing benefits “when there was better information,” said Schwarzenegger spokeswoman Camille Anderson.

A rise in benefits is long overdue, contend attorneys, labor unions and other advocates for injured workers. Average permanent disability payments by the Schwarzenegger administration are among the nation’s stingiest.

According to one group, Voters Injured at Work, people who lose a foot get $28,820, compared with the national average of $80,976. A lost eye fetches $17,714 versus $74,558. And deafness in one ear is worth $5,280, 83% below the national average.

That disparity may be about to be fixed, at least a little. The California Division of Workers’ Compensation is issuing proposed regulations that, if approved, would boost permanent disability payments by at least 16%. And in the Legislature, Senate President Pro Tem Don Perata (D-Oakland) is sponsoring a bill that over three years would double the total number of weeks that workers can receive permanent disability checks.

“We want to be able to look an injured worker in the eye and say we’re not embarrassed about how we’re treating you,” Perata said. The senator, who’s had two similar bills vetoed by the governor in 2006 and 2007, said a compromise with Schwarzenegger might be possible this year, now that the administration has acknowledged that some benefit increase is merited.

“It’s a start,” Perata said. “I hope to either push them or pull them closer to where we think it [benefits] should be.”

Perata’s measure, SB 1717, is expected to win approval from the full Senate and move to the state Assembly. The bill is opposed by business lobbyists, led by the California Chamber of Commerce. Insurer trade groups, however, have taken a neutral position, insisting that a decision to raise benefits is best left to employers and labor groups.

Increasing the disability benefits can’t come quickly enough for tens of thousands of injured workers, said Sue Borg, president of the California Applicants’ Attorneys Assn., whose members are lawyers representing claimants in state workers’ compensation courts.

“These people are in a vise. How many paychecks are they away from not paying their mortgages?” she said. “Increasing permanent disability doesn’t solve everybody’s problems, but it does give them a little bit more footing so they can get back on their feet and figure out what to do next.”

Trying to get by on Schwarzenegger’s drastically lowered awards is “ridiculous,” said Judith Dennis. Dennis, 56, severely hurt her knee in November 2005 while working as an assistant manager of a Pier 1 Imports store in San Diego. Her proposed permanent disability benefits under the current formula would be $3,212, compared with $38,173 under the previous formula.

“You can’t survive on that,” said Dennis, who lost her apartment and hasn’t been able to hold down a job because of pain related to her accident and two surgeries. “You have to have something to live on until you get better.”

Business groups acknowledge that permanent disability benefits have fallen. But they contend that most of the drop resulted from a mandate in the 2004 law that requires awards be based on “an objective” set of guidelines developed by the American Medical Assn.

Jerry Azevedo, a spokesman for the Workers’ Compensation Action Network, an employer coalition, said his members might “be inclined to support” the more modest benefit hike proposed by the Schwarzenegger administration, if data show it’s merited.

A 16% hike in average awards could add annual costs of as much as $400 million to California’s $12.6-billion system but shouldn’t be enough to cause employers’ premiums to rise, said Carrie Nevans, administrative director of the California Division of Workers’ Compensation.

“I don’t think it’s going to affect rates,” she said. “I think there’s definitely some slack in the system.”

--

marc.lifsher@latimes.com