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A workers compensation reform bill set to be proposed in California would limit some companies' ability to self-insure for workers comp claims and would increase total permanent disability benefits for workers by $720 million per year, according to a summary of the bill posted online.
The summary of S.B. 863, drafted by the California State Assembly Committee on Insurance, was posted Tuesday by the Sacramento Business Journal. It lists 45 amendments to be included in the upcoming reform bill.
Professional employer organizations and temporary staffing agencies would be prohibited from self-insuring for workers comp coverage, according to the summary. PEOs and staffing firms that are self-insured would be required to purchase workers comp insurance by Jan. 1, 2015.
Another point says that aggregate permanent disability benefits would increase by about $720 million per year during a two-year period. The number of benefit weeks and the weekly benefit amount for permanent disability benefits also would be recalculated "so that compensation amounts more accurately reflect loss of future earnings," the summary says.
The bill also would establish an independent medical review process for workers comp medical treatment disputes, as well as an independent bill review process, according to the summary. Other points include a fee schedule for ambulatory surgery centers and a limit on reimbursements for certain home care services.
The California Senate Committee on Labor and Industrial Relations cancelled a hearing scheduled for Wednesday on S.B. 863.
Reports published last week said that the reform deal aims to reduce employers’ workers comp costs so that an increase in permanent disability benefits paid to injured workers will not increase employers’ premiums.
California’s legislative session ends Aug. 31.
SAN FRANCISCO—California workers compensation indemnity claims frequency remains elevated after experiencing its first increase in more than a decade during 2010, according to the Workers’ Compensation Insurance Rating Bureau of California.