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DATE: March 16, 2004
TO: Board of Supervisors
SUBJECT: Resolution Supporting the Workers' Compensation Reform and Accountability Act

SUMMARY:
California employers pay the highest workers' compensation costs in the nation.

Governor Arnold Schwarzenegger identified reform of the workers' compensation system as a critical element in improving California's economy and restoration of the fiscal health and stability of state government.

Last year's San Diego County Manufacturing Summit identified increased costs of workers' compensation as the primary factor harming local businesses.

Given the fiscal challenges the County faces, increased workers' compensation costs compound the reduction of funds available to provide needed services to the residents of San Diego County.

Today's action will adopt a resolution in support of a proposed statewide initiative entitled the Workers' Compensation Reform and Accountability Act.

RECOMMENDATIONS
Chairwoman Dianne Jacob:

  1. Adopt the attached Resolution expressing the Board of Supervisors' support of the Workers' Compensation Reform and Accountability Act.
  2. Direct the Chief Administrative Officer to draft a letter for the Chairwoman's signature urging the 18 cities throughout the region to adopt a similar resolution.
  3. Direct the Chief Administrative Officer to convey our support to the Governor's Office, the County's Legislative Delegation and Sacramento Representatives.

Fiscal Impact:
There are no fiscal impacts associated with this recommendation.

BACKGROUND
The County Board of Supervisors, at my request, approved the hosting of a Manufacturing Summit in 2003 to provide local manufacturers with a forum to tell their stories and to make recommendations for improving the business climate. Representatives from the technology and bio-pharmaceuticals sector, aviation, mechanical, and heavy and light industrial businesses as well as many individual speakers each addressed a growing list of issues that plague our economy.

The top issue identified at the summit by business leaders as doing the most harm to our local business climate was the increasing costs of workers' compensation.

Concern with the growing costs of workers' compensation in this state has not been limited to local business leaders. Given the fiscal challenges the County faces, increased workers' compensation costs compound the reduction of funds available to provide needed services to the residents of San Diego County.

Before the end of the 2003 legislative session, then Chairman Greg Cox wrote the delegation to urge the passage of workers' compensation reform, noting that the County's workers' compensation costs had soared from $12.2 million in FY 1997-98 to $20.9 million in FY 2001-02. Last year, the County spent nearly $25 million on workers' compensation.

Governor Arnold Schwarzenegger identified reform of the workers' compensation system as a critical element in improving California's economy and restoration of the fiscal health and stability of state government.

In his State of the State Address, Governor Arnold Schwarzenegger stated the need for workers' compensation reform and called on the State Legislature to send him a reform package by March 1, 2004. The State Legislature did not act on a workers' compensation reform proposal by that deadline and as a result, the Committee for Workers' Compensation Reform and Accountability have proposed a workers' compensation reform initiative and is circulating petitions in an effort to qualify the statewide measure for the November 2004 ballot.

What this measure does:

  1. Proof of Injury: The initiative will require the employee to prove an injury occurred at work. It will require the employee to prove the injury by a preponderance of the evidence. It will also require that all workers' compensation laws be interpreted in an impartial and balanced manner so that the employee and the employer will be considered equal before the law.
  2. Apportionment of Permanent Disability: The initiative provides that injured employees receive permanent disability benefits from their employer only for the portion of disability caused as the direct result of the injury arising out of and occurring in the course of employment. Employers would not be liable for injuries or conditions that are not a direct result of the employment.
  3. Treating Physicians: The initiative requires that treating physicians, whether pre-designated or selected thirty days after the injury occurs, be mutually agreed upon by the employer and the employee.
  4. Qualified Medical Evaluators: The initiative will require that the selected Qualified Medical Evaluator's specialty is relevant to the type of injury for which the evaluation is sought. Evaluators will be required to support their opinions using objective findings.
  5. Medical Treatment Dispute Resolution: Disputes regarding the denial, modification, delay or approval of medical treatment would be decided by medical professionals.
  6. Standardized Treatment Guidelines: The diagnosis and treatment of industrial injuries will be governed by guidelines established by the American College of Occupational and Environmental Medicine. Those guidelines are based upon the best available scientific evidence. This will require evidence based on opinions by doctors and it will remove speculation and conjecture as the basis for an opinion.
  7. Benefits for Convicted Criminals: Inmates will no longer be permitted to make a claim for disability benefits for injuries that occur while they are in custody.
  8. Workers Rights: Permanent disability benefits will be increased for the most seriously injured
    employees.

Today's action will adopt a resolution in support of the proposed Workers' Compensation Reform and Accountability Act.

I urge your support.

Respectfully submitted,

 

DIANNE JACOB
Chairwoman

 

A RESOLUTION OF THE BOARD OF SUPERVISORS OF THE COUNTY OF SAN DIEGO
IN SUPPORT OF THE WORKERS' COMPENSATION ACCOUNTABILITY AND REFORM ACT

WHEREAS, county leaders are in a position to make decisions governing local affairs, educate the citizenry as to the benefits of responsible local government, and advocate on behalf of citizens; and

WHEREAS, California employers pay the highest workers' compensation costs in the nation; and

WHEREAS, costs for workers' compensation have grown dramatically for both public agencies and private businesses, which has impacted the county's ability to provide public services and promote economic development efforts of the county; and

WHEREAS, the implementation of workers' compensation reforms such as those included in the Workers' Compensation Reform and Accountability Act would result in significant cost savings to the county; and

WHEREAS, the Workers' Compensation Reform and Accountability Act would include the following reforms:

  1. Proof of Injury: The act will require the employee to prove an injury occurred at work. It will require the employee prove the injury by a preponderance of the evidence. It will also require that all workers' compensation laws be interpreted in an impartial and balanced manner so that the employee and the employer will be considered "equal before the law."
  2. Apportionment of Permanent Disability: The act provides that injured employees receive disability benefits from their employer only for the portion of disability caused as the direct result of the injury arising out of and occurring in the course of employment. Employers would not be liable for injuries or conditions that are not a direct result of the employment.
  3. Treating Physicians: The act requires that treating physicians, whether pre-designated or selected thirty days after the injury occurs, be mutually agreed upon by both the employee and employer.
  4. Qualified Medical Examiners: The act will require that the selected Qualified Medical Evaluators' specialty is relevant to the type of injury for which the evaluation is sought. Evaluators will be required to support their opinions using "objective findings."
  5. Medical Treatment Dispute Resolution: Disputes regarding the denial, modification, delay or approval of medical treatment would be decided by medical professionals.
  6. Standardized Treatment Guidelines: The diagnosis and treatment of industrial injuries will be governed by guidelines established by the American College of Occupational and Environmental Medicine. Those guidelines are based upon the best available scientific evidence. This will require evidence based opinions by doctors and it will remove speculation and conjecture as the basis for an opinion.
  7. Benefits for Convicted Criminals: Inmates will no longer be permitted to make a claim for disability payments for injuries that occur while they are in custody.
  8. Workers' Rights: Permanent disability benefits will be increased for the most seriously injured employees.
NOW THEREFORE BE IT RESOLVED, by the San Diego County Board of Supervisors that the County supports the Workers' Compensation Reform and Accountability Act.