Commentary…

Mid-Session Musings

By: Mark Webb

It may not be the exact mid-point in the California legislative session, at least as far as the legislative calendar is concerned, but the rest of the session is starting to come into focus.

We know that the high priority bills, Senate Bill 1127 (Atkins) and Assembly Bill 1751 (Daly) have crossed over to the other chamber. Notwithstanding the provocative inferences appended like a remora to Assembly Bill 2848 (Santiago) and the reach for your air sickness bags implications for the healthcare sector with Senate Bill 213 (Cortese), the real battle for 2022 will be with Senator Atkins’ bill – who is also the President Pro Tem of the Senate – and  Assemblymember and Insurance Committee Chair Tom Daly’s bill, who at least at the moment continues to have the authority of the Speaker to deal with bills in his Committee as he sees appropriate.

As a reminder, for the larger workers’ comp community the issue with SB 1127 is the shortening of timeframes to decide whether to accept or deny a claim. For the community most affected by presumptions – at least for the moment mostly State and local governmental agencies – the other issues framed with this legislation are increased temporary disability benefits for those claiming presumptive cancer claims and a new penalty structure – shockingly inuring to the benefit of applicant attorneys – for denials of presumptive claims determined by the Workers’ Compensation Appeals Board to be “unreasonable”. For those around a few decades ago, I think we know how that would turn out.

There is no justification for the soundbites proponents of SB 1127 are propounding at the Capitol. Various reports from RAND over the past two years show there is not indiscriminate and unjustifiable denials of claims of presumptive injuries. Studies by both the California Workers’ Compensation Institute and RAND demonstrate the shortened compensability timeframes create more costs and disputes than they alleviate. But the bill continues – driven by tropes that have been plaguing the system for generations.

Shocking as it may seem, not every claim for workers’ compensation benefits does in fact state an injury arising out of and in the course of employment.

To address the abuses that come from a “just say no” attitude among some claims administrators requires a more robust and well-defined audit and enforcement structure and not amending the Labor Code to create functionally conclusive presumptions.

Assembly Bill 1751 in its current form simply extends the sunset for COVID-19 presumptions to January 1, 2025. That sounds simple enough, but the employer community should take a quick time out to consider all the benefits of the way this presumption was crafted. This is particularly the case if employers and insurers are planning ahead for the dreaded long-COVID that may vex the system for years to come. Such an analysis, however, may require a degree of foresight not currently being exhibited in the system. It should also be noted that empirical evidence, both in California and nationwide, does not support the proposition that workers’ compensation was forced to pay for non-industrial COVID claims to any great degree over the past two years.

So, all eyes will continue to be focused on Sacramento over the next several months. It may well turn out that due to the efforts of employer and insurer associations and their lobbyists, 2022 will not be as disruptive as many would have thought in January.

Even if this ends well in 2022, it does not bode well for 2023.

 

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.