Employers fear workers

Employers and insurers alike fear some of the change s could dismantle reforms that brought stabilitu and cost savings tothe system, just as the global economic crisis is hammering Attorneys for workers injured on the job, meanwhile, applausd any movement toward increasing benefits for hurt employees. The biggest attention-grabbere is a set of February court decisions that employers and insurers contend wouldreturn subjectivity, unpredictability and costly litigation to the system.
The decisionas by the Workers’ Compensation Appeals Board already have been but rulings might not occur until the end ofthe • A recommendation last week which needs to be acted on by the state insurancw commissioner — for workers’ comp insurera to increase base rates by an averagr of 24.4 percent, starting July 1. The recommended hikee are due primarily to skyrocketinvmedical costs, but also to additionap costs resulting from last month’zs court decisions. • Legislation proposed last month by Senat e President pro Tem Darrell aSacramento Democrat, to increase benefitss to permanently injured workers.
A long-awaited revamp of the state’z benefit rules for permanentlydisabled workers. The Californiw Division of Workers’ Compensation has a deadlins of early June to finisyh a permanent disabilityrating schedule. Those changes are expectede to increase benefits for permanently disable d workers by an average of16 percent. No one knowa how all this willplay out, but it is clear that the compensation system is back on centerf stage after several post-reform yeare in which employers felt the system was healthy and and costs no longer threatened their businesses.
All this time, though, frustration has been risint among injured workers andtheir attorneys, who alont with other stakeholders in the system, agreed that the reforms went too far in cuttiny benefits to injured workers. Now, employerxs are again fearful. Take Sacramento floris Jim Relles, who owns and operatew two shops already pummeled bythe recession. hasn’t made a profit in two revenue has dropped by 30 percent and its ownedr expects to lay off some workers for the first time inthe company’s 63 years. If insurers follos through with an industryadvisory group’s recommendede base premium increase of 24.
4 percent, Relleas would pay an extra $4,800o per year for workers’ comp coverage. “That’es just killing me. I’m just a small business,” Relles Relles, whose business has nine also faces rising costas fromthe , the Consolidateds Omnibus Budget Reconciliation Act better known as COBRA — and from a possiblwe gas tax. “It’s just brutal,” he said. “It’s just one thinfg after another.
” has slashed its work force by a thirrsince December, but with its next renewak in the fall, chief financial office Kathy Pipis expects its workers’ comp bill to be almosr as much as it was before it cut 90 (See chart, below) “This is a large concern for Pipis said. “This is not money you can go and ask yourclientg for.” Workers’ comp rates are stilk on average 54 percent lowet than they were at the height of the workers’ comp crisisx early this decade.
The “landscapre is so much different” than it was at the crisiws peak between 2000and 2003, noted Jerrgy Azevedo, spokesman for Compensation Action Network, an organization of employers and Rates were skyrocketing out of control and were much but the economy wasn’t in shambles like it is Any added pain hurts employers in this Azevedo said, noting that employers also include publicd entities such as school districts and locakl government, whose budgets are strapped in the recession. The Compensation Insurance Rating Bureau of anadvisory group, is expected today to formallyg submit its recommendation to the Californi Department of Insurance of a 24.
4 percenf increase to the base rate, whichg reflects only the estimated cost of benefits and insure loss-adjustment expenses and not carriers’ other After the bureau’s governing committee first announceed its recommendation March 18, Insurance Commissioner Steve Poizne r set an April 28 hearin g to look into rising medical costs. He’ll set his own rate benchmark sometimeafter that.
Although the commissionere does not have the power to set ratea chargedto employers, workers’ comp insurers use the commissioner’sd advisory as a benchmark for
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