Proposed changes in store for California Workers’ Compensation System

Assembly Bill 749 (AB 749) has been sent to Governor Davis for signature.

FLASH:Benefit Increase Bill Jammed Through Legislature in One Day
- Workers’ Compensation Executive- 2/5/02

Both houses of the Legislature mainly along party lines passed this year's workers' compensation benefit increase bill in a single day yesterday. By the end of Monday, the State Senate had passed AB 749 on a 23-14 vote. Despite objections from Republican members, the bill passed due to the influence Senate President Pro Tem John Burton holds over the upper house and because it was his pet legislation. Next the Assembly Insurance Committee hastily met -- without prior public notice, it should be noted -- and passed the bill after a hearing on the matter. Later in the day, the Assembly Insurance Committee approved the measure 44-29. The bill is expected to cost the state's employers an extra $3.5 billion a year in workers' comp costs, according to the Workers' Compensation Insurance Rating Bureau. It also includes reforms that may save as much as $1.5 billion, according to an analysis of AB 749. Gov. Gray Davis is expected to sign the measure within a few days.

Highlights of the AB 749

Should the reform bill be signed by Governor Davis, the maximum temporary disability benefit will increase from the current $490.00 per week to $602.00 per week for injuries occurring after 1/1/2003. There is a subsequent increase for injuries after 1/1/2004 to $728.00 per week and then an increase for injuries after 1/1/2005 to $840.00. Adjustments for injuries occurring after 1/1/2006 will be attached to increases in the State’s average weekly wages.

There will also be changes in the maximum permanent disability levels for injuries occurring after 1/1/2003. The current maximum level will increase from $230.00 per week to $270.00 by the year 2006. There will also be changes in the manner in which permanent disability is calculated.

AB 749 includes a number of changes that will impact medical benefits, stiffer penalties for fraud case as well as other areas of the California workers’ compensation system. Upon Governor Davis’ approval, ABD will provide further highlights of the changes and how this bill will impact Workers’ Compensation Programs.