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In 2012, the state passed Senate Bill 863. The bill introduced several reforms for the workers’ compensation system. While the true value of the reforms will take years to manifest, the state is already seeing positive changes. In late 2016, the Workers’ Compensation Insurance Rating Bureau (WCIRB) released a cost-monitoring report of the reforms in SB 863. The report discovered that annual system-wide savings is around $1.3 billion or 7% of total costs – a remarkable savings rate.
At first glance, increased annual savings in the workers’ compensation program may make some employees worry about coverage. In practice, the reforms set forth in SB 863 offer benefits for both employees and employers. The two overarching goals of the bill are to increase permanent disability benefits and to reduce costs and benefit delivery times across the system.
The bill strives to accomplish these goals in many ways, including:
As of the review period in late 2016, the state has realized some of its cost-saving goals. The report shows:
While the bill is saving the state money in many areas, the reforms have contributed to unexpected outcomes. The report also discovered:
The 86-section reform bill brings many complex changes to the California workers’ compensation program. Cost-monitoring reports give the state a way to gauge progress and identify the strengths and weaknesses of the plan in action. It also gives context to the immediate changes employees and administrators notice on a daily basis.
Cost savings and experiential reports over the next few years will better reveal the impact of the reforms on covered employees, employers, and insurers. Unfortunately, cost reporting does not provide insight into the everyday employee’s compensation experience.
Some of the reforms, including the independent medical review process, can prevent injured employees from receiving much needed prescription drugs and medical treatments. Cost savings may relieve some financial burdens within the system but create new service issues.
If you’re concerned about how the reforms may affect your workplace injury claim, discuss your situation with a workers’ compensation attorney. Depending on your injury, the bill could help or hinder your claim. An attorney who understands how SB 863 has changed the program can help you fight for your right to fair compensation.