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California workers comp reform legislation likely in 2012: Employer groups

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SACRAMENTO, Calif.—Employer groups say workers compensation reform legislation is likely next year in California, driven by employers’ desire to reduce costs and labor’s push to increase benefits.

“At this point, I would be shocked if you didn’t see something substantive” emerge in the form of legislation and/or regulatory changes, said Jason Schmelzer, chief lobbyist for the California Coalition on Workers’ Compensation, a Sacramento, Calif.-based employer organization.

Even though employers and labor groups want changes, it’s not guaranteed that reform legislation will be adopted in 2012. said a spokesman for the Sacramento-based Workers’ Compensation Action Network. Even so, efforts to identify potential system changes and quantify their costs are being discussed, the spokesman said.

Much discussion

“There are a lot of discussions going on in earnest,” the WCAN spokesman said. “Whether that means there is a deal done in the next legislative session, nobody knows” that for certain.

But members of the governor’s administration have said they want cost-saving system reforms, the spokesman added. Additionally, the governor, in recent messages accompanying workers comp bill vetoes, said he is not interested in piecemeal changes.

Employers want workers comp changes, in part, because system costs are increasing while the last round of reforms adopted in California have been diminished by court decisions, the spokesman said. Meanwhile, more claims are being litigated and temporary disability claims durations are dragging on longer than before.

“The thinking is that when you look at almost all of the key tenets of the 2003 and 2004 reforms, they have all been undermined in some fashion,” he said.

Other changes

Among other changes, employers want California’s lien filing system fixed, the spokesman said.

In addition, changes that remove unnecessary frictional costs could help fund benefit increases, sources said.

“Costs are going up and there is debate over benefit levels that need to be addressed, Mr. Schmelzer said “To the extent we can do both at the same time, we think it’s a good idea.”