Jan 1, 2013
The new California law was signed by Governor Jerry Brown to reduce workers' compensation costs for California businesses while increasing benefits to employees injured on the job.
Senate Bill 863 was approved with bipartisan support in the Legislature after being introduced by Senator Kevin De León (D-Los Angeles).
SB 863 aims to increase benefits to permanently disabled workers by $860 million a year while giving employers a break on insurance costs. The new California law is said to mean quicker resolution because doctors will make decisions rather than the courts.
"These significant reforms save hundreds of millions of dollars for California's employers while preventing an imminent crisis of skyrocketing rates that would have hurt both injured workers and businesses," said Governor Brown. "It's extraordinary to see Republicans and Democrats come together to solve a problem before it becomes a crisis."
The legislation makes reforms to an antiquated system in which businesses buy insurance to provide medical care and compensation to workers who injure themselves or get sick on the job.
The cost of workers compensation insurance in California skyrocketed in the past 24 months, rising from $14.8 billion to $19 billion, according to the governor's office.
Under the new state law, California businesses could save $1 billion in 2013. 527,000 workplace injuries were reported statewide last year.
The legislation's provisions create an independent review process for medical treatment and billing disputes, fee schedules for home health care, language interpretation and other workers comp-related services, and fees for current and future lien filings.
The new law also shortens the timeline for approval of treatment from 24 months down to 3 months.
The California Workers Compensation Reform Law increases compensation for disabled workers by $740 million a year, which will boost benefits by nearly 30 percent for individual disabled workers.
The California Legislature included $120 million a year in a special fund for victims of catastrophic accidents who can't go back to to work.
The reform law limits the role of chiropractors, so they cannot serve as a worker's primary care doctor after hitting a 24 visit/year cap.
"Today we're one side, and that one side is helping bring down the cost to businesses while increasing benefits to injured workers," declared Governor Brown as he signed the Workers Compensation Reform Law.
The new law is now in effect.