Inconsequential Year?

By: Mark Webb

From a high level, it would appear that 2022 was not a consequential year for the workers’ compensation system in the California Legislature. As is annually the case, there were rumors of big deals and looming disaster in the first few months of the session. But by the Summer Recess, most of that talk quieted down considerably.


In what seemed to be an eerie continuation from past sessions; however, the issue of presumptions appeared once again to be immune from being overshadowed by any of the great issues facing California’s economy and its residents. And so, as we watch the clock run out on the 2021-22 biennial session, we still see presumption and presumption-related bills moving to the Governor’s Office.


The high-profile bills, Senate Bill 1127 (Atkins) and Assembly Bill 1751 (Daly), are going through the final votes on their way, it is assumed, to getting chaptered. SB 1127 addresses a number of issues, including shortening the timeframe to investigate presumptive claims from 90 to 75 days, increasing the availability of temporary disability (TD) payments for presumptive cancer claims, and creating new penalties for denying presumptive claims unreasonably.


It also requires the Division of Workers’ Compensation (DWC) to, upon appropriation by the Legislature, identify and amend its existing data collection processes to include collection of the date on which the claimant is notified of acceptance, denial, or conditional denial of liability for a claim, consistent with this section. That would be the amended Labor Code § 5402.


What does this new data collection mean for employers? According to the Assembly Floor Analysis, the proponents of the bill want the DWC to spend at least $12 million to get this information. That will be $12 million more in assessments against all employers.


AB 1751 (Daly) extends the COVID-19 compensability presumptions for another two years. That is basically all it does, and efforts to make it do more were effectively resisted. For now.


But then there are the curious cases of Senate Bill 284 (Stern) and Assembly Bill 334 (Mullin). These were 2021 bills dealing with the expanding the post-traumatic stress disorder (PTSD) presumption and adding peace officers of the Department of Fish and Wildlife and the Department of Parks and Recreation to the already existing skin cancer presumption, respectively. SB 284 is back in the Senate waiting for concurrence in Assembly amendments, and AB 334 has passed the Legislature and will soon be on the Governor’s desk. These were held in 2021. Whether the Governor actually or tacitly greenlighted them this year remains to be seen.


It should be noted the COVID-19 presumption will be extended to January 1, 2024 according to recent amendments. The PTSD presumption sunsets effective January 1, 2025. So we will be dealing with those presumptions in the foreseeable future. The COVID-19 presumption as exists in AB 1751 is unique for several reasons – the most important of which is that is applies to private-sector workers. So too did Senate Bill 213 (Cortese), a failed attempt this session to create a number of presumptions for illnesses and injuries affecting workers who provide direct patient care in acute care hospitals. Look for this issue to be on the agenda again next year.


We are at the point in the system where we need to have a frank discussion about what the system is intended to accomplish.


It goes beyond who can exercise what leverage at any given point in time in Sacramento. There is little – if any – evidence that presumptions change claims administrator behavior. For certain illnesses, such as cancers, occupational disease, and PTSD, the system will perform adequately based on principles of risk and exposure, but it will never perform optimally for employers and workers. How to address what happens during the period of time between notice and a determination of compensability should be the focus of the debate now and in 2023. That debate means more than enacting one-sided laws that make it harder to say “no”.


Note: The opinions expressed herein may or may not be those of Workers’ Comp Executive. Mark Webb is a former Arizona insurance regulator, insurance company chief compliance officer, and is an expert in corporate governance, risk and compliance. He is the owner of Prop 23 Advisors.