FOR RELEASE: MEDIA CONTACT:
February 26, 2004 (#009) Norman D. Williams
(916) 492-3566
INSURANCE COMMISSIONER JOHN GARAMENDI APPLAUDS INTRODUCTION OF COMPREHENSIVE WORKERS' COMPENSATION REFORM BILL BY ASSEMBLYMAN JUAN VARGAS
Calling it California's
best hope for a comprehensive solution to the workers' compensation crisis,
Assemblyman Juan Vargas (D-San Diego), and California Insurance Commissioner
John Garamendi announced on Wednesday the introduction of ABX4 15, aimed at
reforming the broken workers' compensation system.
Garamendi and Vargas, who have worked closely on
the workers' compensation issue, believe the legislation has the potential to
bridge the differences between workers and employers and to break down obstacles
currently slowing passage of reform.
"Assemblyman Vargas and I have crafted a
far-reaching, powerful piece of legislation that should serve as the backbone to
the ultimate creation of a comprehensive reform of this broken workers'
compensation system," said Commissioner Garamendi. "This legislation
must be passed soon, by March 31 in order to benefit employers this year. We
cannot afford to stand by while an impending political train wreck bears down on
California's employers and injured workers."
Assemblyman Vargas added that this measure contains
important elements that will help complete the overhaul of the system that began
with new laws he helped push through last year. "This bill strengthens the
reforms established in last year's legislation and will serve as a compromise
measure," Assemblyman Vargas said.
Commissioner Garamendi is scheduled to announce the
advisory pure premium rate for the workers' compensation system in July. If
reform legislation is signed by March 31, he will be able to calculate the
potential savings and adjust his recommendation accordingly to provide some
relief to employers this year.
If, however, legislation is not passed by that date,
the potential for savings to be felt by employers this year will be lost.
"That is why this legislation must pass soon," Commissioner Garamendi
said. "California's employers and its entire economy cannot wait any
longer."
The new bill, introduced Feb. 19, calls for significant
changes in the workers' compensation system, including:
* Creation of an independent medical examiner (IME) to resolve disputes
over treatment in permanent partial and total disability cases
* Requiring employers to deliver immediate benefits for injured workers,
allowing the employer additional time - up to one year - to dispute claims
* Through the utilization of effective and efficient medical treatment
require physicians to use the descriptions and procedures of American Medical
Association guidelines. Collect medical billing data to identify medical billing
and treatment abuse by providers
* Make uninsured employers subject to felony charges, as opposed to the
current misdemeanor charges
* Change the system to encourage employees and employers to work toward
returning injured workers to the job faster
* Add two additional voting members to the State Compensation Insurance
Fund Board. Clarify the Insurance Commissioner's authority over State Fund
* Address the irrational penalty structure on refused or delayed benefits
* Regulate minimum loss cost insurance rates to stabilize the market and
pass through reform savings to policyholders
* Establish a pilot program for qualifying carve-outs to integrate health
and disability benefit delivery