Deukmejian Signs Disability Benefit Increase, Reforms

Gov. George Deukmejian signed legislation Tuesday to boost disability benefits for injured workers by 50% while beginning what lawmakers expect to be a years-long job of overhauling California’s $8-billion workers’ compensation system.

The two bills were described as a bipartisan compromise hammered out by legislators mediating among several of the Capitol’s most combative special-interest groups: employers, labor, insurers, doctors and lawyers.

7-Year Logjam

By signing the bills, Deukmejian ended a seven-year legislative logjam that began when the Republican governor was elected in 1982 and declared that injured workers would get no benefit increases until the Legislature agreed to reforms of the system sought by employers and insurance companies.

The maximum benefits, frozen at $224 weekly since 1983, will increase to $336 by 1991 for workers who suffer on-the-job injuries after the legislation takes effect on Jan. 1.

“This legislation . . . will help to restore some balance and fairness to our worker compensation system,” Deukmejian said before signing the bills at a ceremony in his office. “It is going to provide additional, much-needed benefits for injured workers in California. At the same time, it is also going to bring about some reforms in the system to make it more cost-effective.”

Assemblyman Burt Margolin (D-Los Angeles), who wrote one of the bills and led months of public and private negotiations on the issue, said the outcome represents an “enormously significant victory” for workers and employers.

“These two bills together will help put a crumbling, widely disrespected system back on its feet,” Margolin said.

Margolin said the benefit increase would be funded by “squeezing waste and fraud out of the system” and by speeding the processing of claims filed by injured workers.

In exchange for the benefit increase, organized labor and lawyers who represent injured workers agreed for the first time to limit “doctor shopping”--the practice of workers having free choice of physicians to evaluate their injuries. The legislation also will limit the ability of workers to collect disability payments for stress-related injuries.

The bills also revamp the vocational rehabilitation system, which employers and insurers have criticized as wasteful, and implement a new system for arbitrating disputed claims before they reach the courts.

‘Not a Panacea’

Despite the widely acclaimed gains, representatives of every interest group involved in the issue conceded that more needs to be done before the workers’ compensation system is returned to satisfactory condition. They said they will continue to push for the elements of a compromise endorsed by Deukmejian earlier this year, which would have doubled workers’ benefits while implementing more dramatic changes in the way the system is run.

“This bill is not a panacea,” said Joseph Markey, a lobbyist for Californians for Compensation Reform, a coalition of employers and insurers. “I think it was as good a settlement as we could come to, given the pressures of the various interest groups, the politics and the timing.”

John F. Henning, secretary-treasurer of the California Labor Federation, said the 50% benefit increase only “whetted the appetite” of the state’s workers for higher disability payments.

“We want more,” he said, adding that organized labor would be willing to accede to additional employer-demanded reforms.

Willing to Live With It

Donald Green, a lobbyist for the applicant attorneys, who represent injured workers, said the lawyers are not satisfied with the final product but “in good faith we are going to have to live with it.”

Green said the lawyers--who are in almost constant battle with insurance companies--want to see more done to reduce the cost of workers’ compensation insurance, which every California employer is required to provide.

Margolin acknowledged that benefits need to be still higher and that more changes probably are needed in the administration of the system. But he predicted that it will be at least three years before all of the parties return to the negotiating table for serious talks.

The governor also took action on these bills:

Therapist sex--Signed a measure by Sen. Daniel E. Boatwright (D-Concord) to make it a criminal offense for a psychiatrist, psychologist or marriage counselor to have sex with a patient.

Foam food containers--Vetoed a measure by Assemblyman Dominic L. Cortese (D-San Jose) that would have prohibited the manufacture, distribution and sale of any rigid polystyrene foam food service product or food packaging made with a chlorofluorocarbons. In a veto message, Deukmejian said the food packaging industry has already voluntarily eliminated 99% of its use of these chemicals, which are thought to be contributing to the depletion of the ozone layer.

Professional wrestling--Signed legislation by Assemblyman Richard E. Floyd (D-Carson) to remove professional wrestling from the jurisdiction of the State Athletic Commission. Floyd argued that pro wrestling is entertainment, not a sport, and is not in need of government supervision.

Auto body parts--Signed a bill by Assemblyman Rusty Areias (D-Los Banos) to require auto body shops to disclose the type of parts that will be used to repair damaged motor vehicles.

Farm products--Signed a measure by Areias to allow fresh California-grown farm products to carry a special seal to increase consumer awareness.

Cal Vet loans--Signed legislation by Assemblyman Bob Epple (D-Norwalk) to increase the maximum value of a Cal Vet home loan from $90,000 to $125,000.

Times staff writer Jerry Gillam contributed to this article.

HOW THE LAW AFFECTS INJURED WORKERS

Here is a summary of how the changes in California’s workers’ compensation system will affect workers injured on or after Jan. 1, 1990.

Benefits: Temporary disability and total permanent disability payments will increase from the current maximum of $224 weekly to $266 weekly on Jan. 1, 1990 and $336 on Jan. 1, 1991. The minimum benefit for most workers, now $112 weekly, will change to $126 or 100% of the injured worker’s average weekly earnings, whichever is less.

Payments for partial permanent disability will increase from $140 weekly to $148 for workers who are 25% disabled or more. Maximum benefits will be paid for 694 weeks, up from the current maximum of 619 weeks.

Death benefits for dependents will be boosted to a maximum of $115,000 from the current $95,000, and the maximum payment for burial expenses will go to $5,000 from $2,000.

Evaluating injuries: Workers not represented by lawyers will choose a doctor to evaluate their injuries from a panel of three physicians selected at random by the state from a pool of qualified doctors.

Workers who do have a lawyer will be required to seek agreement with their employer on a doctor to evaluate their injuries. If they cannot agree, the worker will choose the evaluating physician but will be limited to one employer-paid doctor from each medical specialty. The employer also will be limited to hiring one physician from each specialty to rebut the conclusions of the doctor retained by the worker.

Stress claims: A worker seeking benefits for a psychiatric injury will now have to prove that at least 10% of the injury was caused by an actual event in the workplace.

Vocational rehabilitation: Injured workers will meet with a vocational rehabilitation counselor within 90 days of their injury, and the counselor will meet with the worker’s physician to speed determination of whether the employee can return to his or her occupation.

Workers will be presumed eligible for vocational rehabilitation one year after they are injured.

Once a worker is eligible for rehabilitation, he or she will have 90 days to apply. After that point, the employer is no longer obligated to provide the services.

Employees in vocational rehabilitation will continue to receive temporary disability benefits, but not at the increased rates other workers will get under this legislation. Vocational rehabilitation participants will get a maximum of $247 per week.