Workers' comp: What's new in 2008
By Robert J. Sherwin
Since 2004, I have tried to bring CSFA members up to date on the many changes that have occurred in workers' compensation due to the passage of Senate Bill 899 (aka: the "Workers' Compensation Reform Act of 2004"). I have advised you of the benefits that have been taken away including the limitations on medical care and the drastic reduction of permanent disability compensation. The horror stories that CSFA attorneys have witnessed with their clients are too many to repeat, but many have been cited by the attorneys in articles for readers of The California Fire Service magazine. I have attempted to guide you through the morass of new laws and regulations and advise you how to avoid jeopardizing your rights by wading through these laws on your own.
CSFA attorneys have also been proactive in attempting to change some of the new laws through the legislative process as well as challenging them before the workers' compensation appeals board. Unfortunately both the Governor and the appeals board have not been receptive to many of these challenges and as a result, injured workers' have seen little relief since 2004. The Governor has repeatedly said that his reforms are working by saving insurance companies and employers millions of dollars in their workers' compensation costs; therefore, he sees little reason to alter or tinker with his success. Likewise, the workers' compensation appeals board in San Francisco, made up of seven commissioners (all appointed by the Governor) has consistently ruled on behalf of employers in either reversing trial judges or upholding unfavorable decisions against injured workers.
No significant legislation was signed by the Governor in 2005 on workers' compensation. In 2006, the Governor did sign legislation eliminating apportionment of permanent disability to any injury presumed industrial for firefighters (heart trouble, cancer, etc.). This legislation was written by this author and supported by CSFA. It was written in direct response to the effects of SB 899 which allow a doctor to "apportion" permanent disability to pre-existing non industrial factors such as family history, genetics, degenerative changes, etc.
Also introduced in 2006 was a bill to restore permanent disability compensation to the level that existed before 2004. SB 899 created a new permanent disability rating system that is based on the American Medical Association Guides For Impairment. Despite a recommendation by the AMA author that these guides not be used to assess permanent disability in workers' compensation, they were nevertheless adopted as part of the new law because they would save money for insurance carriers. Indeed, it quickly became apparent that injured workers were receiving substantially less in permanent disability compensation as a result of this new system. An initial study completed in 2005 indicated that permanent disability ratings were reduced by 50-70% under the new system. Further studies in 2006 confirmed this and based on a promise from the Governor that he would revisit the issue of restoring permanent disability if information supported doing so; a bill was passed in 2006 by the legislature partially restoring permanent disability. The bill called for an increase in permanent disability beginning in 2008. The Governor vetoed the bill stating that further information was necessary to justify altering his reform.
In 2007, a new study by an independent agency of the State, made up of appointees by the Governor, again confirmed that injured workers were getting short changed on permanent disability and that ratings were approximately 40 - 70% less than the under the previous system. Parties from both sides of the system now realized that the reform legislation had gone too far in cutting benefits and that some corrections were necessary and warranted. As a result, the legislature passed and submitted to the Governor, SB 936, a bill to restore permanent disability with the changes to become effective in 2010. Again, the Governor vetoed the bill claiming that the permanent disability inequities could be remedied by his Administrative Director through regulatory change. As of January 31, 2008, no such changes have been made. Statistics provided in 2007 by the U.S. Chamber of Commerce establish that California now ranks near the bottom of all states in the amount of permanent disability compensation provided to its injured workers. Overall California was the 4th lowest state in the country in permanent disability compensation.
2007 also saw significant court decisions on interpretations of the new law and the majority of these decisions were against the injured worker. Apportionment of permanent disability was the subject of many decisions and will be the subject of many cases throughout 2008. SB 899 allows a doctor to "apportion" or attribute part of an injured worker's disability to pre-existing yet asymptomatic conditions such as genetic predisposition and degenerative arthritis. This results in a drastic reduction in the amount of permanent disability compensation an injured worker receives in permanent disability. As stated earlier, we were successful in getting apportionment eliminated on presumptive injuries, but many injuries such as orthopedic injuries are not covered by presumptions and thus are subject to the new provisions on apportionment. In a recent rare court decision favorable to injured workers, the Court of Appeal in Northern California ruled that apportionment to "age" is prohibited by state laws that preclude discrimination on age, gender, sex, etc. Thus, an orthopedist's attempt to attribute part of an injured workers' back disability to age degenerative changes was held improper as a form of discrimination.
Senator Carol Migden of Sonoma County has introduced legislation in SB 1115 that prohibits apportionment of permanent disability to any condition such as age, gender, sex, that is protected by law. Undoubtedly, this bill will pass the legislature but whether the Governor will sign the bill will be another story.
There will also be another bill introduced to restore permanent disability and whether it will meet the same fate as those in 2006 and 2007 remains to be seen. You may be called upon later in the year to contact the Governor to urge him to sign Senator Migden's legislation and any other that seeks to restore the benefits that were taken away from you in 2004. In the meantime, stay safe and healthy.