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California redux

As most employers will recall, even those with limited California exposures, the states workers’ compensation system underwent a fairly large-scale overhaul in 2004. Unfortunately, as most experts and casual observers will agree, the underlying inefficiencies and inequities of the California system remain and seem to be getting worse by the year.

Fast-forward to the current legislative session – two California lawmakers are working to pass a new Workers’ Compensation reform bill before the legislature adjourns at the end of August. The proposed bill will address the following:

  • Restore permanent disability awards, which were significantly cut back in the 2004 reform
  • Severely restrict the employees ability to add a psychological component to their claim
  • Revise/relax the “MPN” regulations , meaning out-of-network doctors who treat injured workers would have to report their treatment of the injured worker to the insurer within 5 days, otherwise, they would not be paid.

Clearly the legislators who are involved in this proposal are walking the line between labor and industry and usually that results in a new law that really doesn’t correct any of the underlying deficiencies. Unfortunately, that seems to be the case here, although if nothing more is accomplished than scaling back the employee’s ability to file nonsensical psychological claims; that is at least some progress.

We will continue to follow this topic and will report back after the close of the summer legislative session.

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William Gallagher Associates is a leading provider of insurance brokerage, risk management and employee benefits services to firms with complex risks and dynamic needs, within industries that include technology, life sciences, financial risks, health care, renewable energy & clean technology, and environmental services. WGA has offices in Boston, MA; New York, NY; Hartford, CT; Princeton, NJ; Columbia, MD; and Atlanta, GA.

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