Workers’ Compensation Reform Runs Into Opposition

A long overdue increase in the ridiculously small benefits for California workers who are injured or killed on the job is at last a good--but far from certain--possibility.

A decent boost in benefits for 75% of the workers or their survivors, along with some good and, unfortunately, some not-so-good “reforms” in the multibillion-dollar workers’ compensation system, was agreed on two weeks ago.

That was when Gov. George Deukmejian announced that, after wrangling among themselves for nearly a year, a powerful combination of unions, employers, insurance companies and the governor’s representative, John O’Hara, approved a plan to overhaul the system.

Since Deukmejian has vetoed every legislative attempt to raise benefits since he took office in 1983, his approval of an increase along with “reforms” in the system to help cut employer costs will help get the plan through the Legislature.

Those reforms would, among other things, make it harder to get benefits for stress claims, reduce benefits for workers getting vocational rehabilitation and for very low wage workers, and reduce “doctor shopping” by workers and employers.

If adopted, the plan could have a nationwide impact because California is often a trend-setter in workers’ compensation, and the systems in many other states urgently need drastic changes, too.

But opposition to the proposed changes began to develop soon after Deukmejian’s announcement and ranged from quietly voiced doubts to furious denunciations.

The attacks are coming from many attorneys and some unions, employers and key political figures who had been excluded from the behind-the-scenes arguments that led to the plan.

Unions of teachers and state employees are concerned that their members will be hurt by proposed restrictions on workers’ compensation claims based on stress alone, and they may end up fighting the plan unless it is revised.

If changes are made in the proposal to satisfy the needs of some groups, though, that could lead to opposition from some of those who already have accepted the plan.

Also, Assembly Speaker Willie Brown startled many leaders in Sacramento when he initially said he would try to stop introduction of the proposal in the Assembly by any Democrat. Let the Republicans do it, he said, presumably because the plan does have some serious flaws.

But he backed away from that high-handed position after some harsh criticism from labor leaders and after he heard arguments from political leaders of the national AFL-CIO during his visit to Washington last week.

He may end up fighting the proposal anyway. And even if Brown merely refuses to support it, chances of passage by the Assembly will be sharply reduced.

The most vehement opposition, however, is from the California Applicants’ Attorneys Assn., whose members handle cases of workers injured on the job.

The association, which makes substantial contributions to state legislators--including Brown--might have enough political clout to stop passage of the proposed legislation, particularly since at least some of their arguments are valid and will attract support from other sources.

A leaflet distributed by the lawyers’ association last Thursday damned the proposal, calling it a scheme by the pro-employer, pro-insurance industry Deukmejian to “take back injured workers’ rights and benefits while guaranteeing insurance companies’ profits.”

To attract attention, the lawyers exaggerated their criticism of the plan. But they correctly noted that some workers in the lowest pay brackets, usually part-time minimum wage employees, actually would take a cut in benefits if their benefits are greater than their wages. That can happen now.

And the lawyers agreed with some teacher union leaders that workers will have a harder time proving that stress was responsible for a compensable disability.

The real question for workers is whether the proposed benefit increases are worth the limits put on their ability to get those benefits.

On balance, the answer is yes.

In brief, the proposal would boost maximum temporary benefits over three years from the current $224 a week to $511 and increase death benefits to the families of workers killed on the job. And the maximum benefit would be indexed, keeping it at 100% of the state average wage weekly wage.

Indexing would mean that Deukmejian or other conservatives could not block future increases even if they mean higher costs to employers.

But the increased benefits being proposed will mean little if any added cost to employers who now finance the $8-billion-a-year system. And employer costs have gone up 50% in the past five years, so just slowing that escalation would help.

Under the proposed plan, costs would be curbed by, among other things, requiring that doctors who examine injured workers be chosen from a panel of presumably neutral doctors.

Currently, employers and workers routinely shop for doctors who find medical evidence to support those who pay their fees, thus adding to the costs.

There have been no increases in benefits in five years, primarily because employers and insurance companies won Deukmejian’s help blocking proposed hikes until the Legislature dealt with charges of abuses of the system.

Many of those charges are legitimate, especially those alleging that some employees improperly get benefits based on stress that can normally be expected on most jobs. But many stress claims are justified, and making workers pay for part of their vocational training is wrong.

In a more perfect world, workers would not have to accept so many changes in the system to get well-deserved benefit increases. After all, those changes mean that workers themselves in effect will pay for most of the increases.

But this is an imperfect world and the agreement among the power blocs was a hard-fought compromise. Improvements can be made in the proposal as it goes through the legislative process, but if some version isn’t finally adopted this year, it may be a long time before benefits are boosted above their current pathetically low level.