Calif. Gets Workers?EUR??,,????'??? Comp. Reform

LOS ANGELES?EUR??,,????'??+California Gov. Arnold Schwarzenegger started the work week off Monday April 19, by signing long-awaited workers?EUR??,,????'??? compensation reform legislation. The bill, past overwhelmingly by a Democrat-controlled legislature, takes effect immediately and projects $7 billion a year in savings for employers in the golden state.

?EUR??,,????'??California is open for business. We are making our state once again a powerful, job-creating machine," Schwarzenegger declared.

The governor pointed out that the state?EUR??,,????'???s onerous workers?EUR??,,????'??? comp. system costs companies more than six percent of total payroll expenses, more than twice the national average.

The crux of the reform package is to cut the $29 billion program by a an initial 25 percent, and eventually by about 30 percent. This will be done by qualifying fewer workers for disability (generic back problems, for instance, will not be covered), limiting medical benefits, requiring injured workers to see approved doctors, and limiting second opinion diagnoses.

Not all claims will be cut, however. Those with permanent disabilities will receive higher benefits than before.

Critics contend the legislation is weighted in favor of the insurance industry, as it lowers their costs while not capping premiums. Insurers will save money, but will they pass on savings to their insureds?

Calif. awaits the reality of the reform legislation.