Sprenkle, Georgariou & Dilles, LLP

While the effort to decrease delays in obtaining medical care for injured workers through legislation has only just begun, the constant refrain from the insurance and employer groups that the sky is falling has started early and gotten even more preposterous. Assembly Bill 1465, introduced by Assemblymembers Eloise Reyes (D-San Bernardino) and Lorena Gonzalez (D-San Diego), would create a statewide Medical Provider Network (MPN) to allow injured workers the ability to seek ...medical care without the delays of the current piecemeal MPN system. A coalition of employer and insurance groups assert there is no reason to establish a statewide MPN because their current MPNs often rife with denial of care in order to save a buck are working just fine. But if the statistics are any indication, that’s simply not true. The delays in medical care under the current system often lead to permanent disability for workers who are unable to obtain care in a timely manner. A recent study released by the Workers’ Compensation Insurance Rating Bureau (WCIRB) confirmed this, showing that in a group of workers studied who didn’t receive treatment within 30 days, 71% of the claims had permanent disability awarded. Alternatively, claims which received timely medical treatment in the first 30 days, only 51% of the claims had residual permanent disability. What’s worse is that a WCRI study released in 2018 showed California’s worker’s compensation system being ranked as the slowest from injury to date of treatment for everything except the initial medical exam. They also claim the creation of a new statewide MPN system, labeled CAMPN under the bill, would override the employers’ MPN systems another false claim. The statewide MPN would simply allow the injured worker the option of choosing a treating physician in either network, allowing more freedom and giving the employee the ability to choose a doctor or specialist in their area so they wouldn’t have to travel hundreds of miles to find one under the employer’s restrictive MPN. The evidence clearly shows the system is rife with delay. While advocates for injured workers and other labor groups seek to help workers and establish a system that works for the employee, business and insurance groups continue their campaign of smoke and mirrors so they can continue to generate record profits while absolving themselves of their obligation to protect their injured workers.

For the children of workers who have been killed or seriously injured on the job, Kids’ Chance of California gives them a fighting chance at earning a college education through needs-based scholarship programs. Founded in 1988, the non-profit, sponsored by applicant attorneys, defense attorneys and insurance companies, recently announced they are now accepting applications for the 2021-2022 school year with the deadline fast approaching. Applications must be received by May 1...5, 2021, in order to be considered for a Fall 2021 and/or Spring 2022 scholarship. Who is eligible to receive such scholarship funds? According to their website, applicants must have a parent who has been killed or seriously injured as a result of a work-related accident that meets the criteria of the California Workers’ Compensation Act and that has resulted in demonstrated financial need. Applicants must also be between the ages of 16-25 at the time of full disbursement of the award, and have obtained a high school diploma by the time of first disbursement of the award. The student applicants and/or the deceased/injured worker parents are also not required to be legal residents of California and may apply and qualify for scholarships. To view a full list of qualifications, click here. Last August, Kids’ Chance of California announced a record-breaking year, helping 48 students by providing over $270,000 in scholarship funds based on specific needs, and they’re hoping for an even bigger year in 2021. If you know someone who may qualify or wish to apply yourself, you can visit their application portal by clicking https://www.kidschanceca.org/scholarships.html.

As we head into the third full week of 2021, here’s a roundup of some of the new employment laws that you may or may not know went into effect at the beginning of the year. First up, on the worker protection front is the new law requiring employers to track and notify employees of potential COVID-19 exposure. Under AB 685, employers must notify employees within one business day of possible exposure to COVID-19 within the workplace and must also notify local public health offi...cials. A detailed safety and disinfection plan is also required to be provided to employees, as well as notice of any COVID-19 related benefits available to them under law. In order to crack down on COVID-19 outbreaks, Cal/OSHA has been granted greater authority to prohibit operations at any workplace deemed to be an imminent hazard to employees, with the greater authoritative power in effect until January 1, 2023. As part of efforts to reduce the spread of the virus, the state has enacted supplemental paid sick time for food workers and some other essential workers, including fire fighters and healthcare workers, allowing for up to two additional weeks of leave so they don’t feel the need to return to work if infected. California also passed several laws, which the legislature apparently believes will reduce pay disparities and create a more equitable employment landscape. Under SB 973, employers with over 100 employees must now report pay data broken down by gender, race and ethnicity to the Department of Fair Employment and Housing (DFEH) before March 31 each year. AB 979 requires publicly traded corporations with principal executive offices in California to appoint at least one member from an underrepresented community to their board of directors by the end of the year. On the pay front, California’s minimum wage increased to $14 per hour for employers with 26 or more employees and $13 per hour for employers with 25 or fewer employees, with other possible increases mandated by local jurisdictions. Agricultural workers will also receive a pay bump for working overtime. For employers with over 26 agricultural employees, they must pay overtime to workers who put in over 8.5 hours in a day or 45 hours per week, a lower threshold than the 10-hour days and 60-hour work weeks that were in place. Lastly, the California Family Rights Act is now expanded to cover employers with 5 employees or more, lowering the threshold from 50 employees, requiring employers to provide unpaid leave of up to 12 weeks each year to bond with a newborn or to care for themselves or a family member with a serious medical condition. A more comprehensive list of the California employment laws that went into effect can be viewed at https://www.littler.com//new-state-employment-laws-set-tak.

There has been a long-standing problem plaguing injured workers: delays in medical treatment. Injured workers wait months for necessary medical care and often have to travel hundreds of miles to see a QME specialist. In a 2018 study released by the Workers’ Compensation Research Institute (WCRI), California was ranked as the slowest from injury to date of treatment following the initial medical exam. ... What’s more, these delays aren’t only hurting thousands of injured workers’ ability to heal and return to work, but worse, delays in medical care increase the number of injured workers who end up with a permanent disability. The Workers’ Compensation Insurance Rating Bureau (WCIRB) released a report confirming that delays in medical care result in significantly higher costs. Access to medical treatment for California’s injured workers has been under attack for years with hurdles such as utilization review, independent medical review, MPNs, and restrictive treatment guidelines being thrown up as roadblocks and causing serious delays. Of course, Covid-19 is a much more urgent and important issue right now. But, it is sad that these delays in care for injured workers are such a non-issue to the legislature and governor.

Not my idea! But Happy Holidays to all, from SG&D!

On November 19, Cal/OSHA’s Occupational Safety and Health Standards Board voted unanimously to adopt the new standards, giving the Office of Administrative Law 10 days to approve. The approval was given last Monday, November 30, putting the standards into effect immediately. Under the new rules, which apply to most workers not already covered by Cal/OSHA’s Aerosol Transmissible Disease standard, employers must establish a written COVID-19 prevention plan that includes provid...ing face coverings to all employees and ensuring they are worn. Under their site-specific plans, employers must also identify and mitigate employee exposure to COVID-19 health hazards through various means, including implementing proper distancing measures, modifying workplaces and staggering work schedules. With regard to reporting, the standard requires employers to record and report outbreaks to public health departments and to provide COVID-19 testing to employees when there are multiple infections or outbreaks at the worksite. These are strong but achievable standards to protect workers. They also clarify what employers have to do to prevent workplace exposure to COVID-19 and stop outbreaks, said Cal/OSHA Chief Doug Parker in a press release. The adoption of the emergency temporary standards was the culmination of a months-long effort by a coalition of labor groups led by WorkSafe and others, calling on the agency to create better protections during the pandemic’s early stages. The groups had petitioned for an emergency temporary standard and a permanent standard back in May, and had also provided draft language for the emergency standard. To assist employers, Cal/OSHA has put together various resources on their website, including FAQs, a one-page fact sheet and a model COVID-19 prevention programs. The agency will also be offering various free training webinars with new dates and times announced soon. A stakeholder meeting, including labor and industry representatives, will be held in December to solicit feedback and recommendations on possible updates. https://www.dir.ca.gov/dosh/coronavirus/

Heading into the holiday season during these challenging times, we want to show appreciation and give thanks to the millions of frontline workers and essential employees keeping our state and country moving forward. We’re thankful for all of our first responders and healthcare workers who continue to put their lives on the line as they battle on the frontlines of a resurging coronavirus. These heroes the nurses, firefighters, doctors, police officers, paramedics and others... we consider to be first responders have been the first line of defense against this new threat, often being separated from their families for long periods of time to keep them safe while protecting the greater population. Their sacrifices will not go unnoticed. We’re also thankful for the unsung heroes, often taken for granted, who provide the essential services we rely on each and every day. We’re thankful for the food workers the farmworkers, farmers, grocery store clerks, baggers, stockers, truck drivers and many more in the food production chain who continue to put food on our tables while working in increasingly hazardous conditions. We’re thankful for the bank tellers, restaurant workers, plumbers, HVAC technicians, delivery drivers and many others who have to interact with customers every day to provide crucial services while risking greater exposure to the virus. And we’re thankful for our public servants the teachers, bus drivers, postal workers, poll workers, social workers, mental health therapists and so many others working to help others and instill a sense of normalcy in our daily lives. Essentially, we’re thankful for all essential workers and any person who continues to do their job in the face of adversity while carrying us through the pandemic. We wish you all a happy and safe holiday season and hope you get to enjoy some quality time with friends and family, even if it must be done virtually. For you we are thankful, and we wish you a happy and safe Thanksgiving.

Temporary Disability Benefits Due To Covid-19 Stay-At-Home Orders The COVID-19 pandemic has had significant financial consequences for many employers and employees. Due to the overall need to protect the public at large from the spread of COVID-19, the state of California and many local governments have issued stay-at-home orders, closing nonessential businesses or allowing them to remain open only if their employees could telecommute. Many businesses were forced to shut dow...Continue reading

Farmworkers in California received a big boost last week as Governor Newsom signed a package of bills creating new and expanded safety measures to protect agricultural workers amidst the COVID-19 pandemic. The first-in-the-nation package with protections designed specifically to protect farmworkers from the coronavirus contained two key pieces of legislation to complement previous formal requests for executive action by the governor. Assembly Bill 2043, authored by Assemblym...ember Robert Rivas (D-Hollister), Assemblymember Eduardo Garcia (D-Coachella) and Assemblymember Lorena Gonzalez (D-San Diego), will fund a bilingual outreach campaign to educate farmworkers on safety measures and guidance by Cal/OSHA as well as COVID-19-related paid sick leave and workers’ compensation benefits. The bill, passed with bipartisan support, also directs Cal/OSHA to track and report agricultural workplace investigations while ensuring enforcement of the agency’s COVID-19 guidance measures. Assembly Bill 2165, authored by Assemblymember Rivas and also passed with bipartisan support, expands the filing of electronic documents to all trial state courts to allow for greater access to courthouses which has been cited as a problem for farmworkers and other rural communities. The signing of the bills follows previous executive actions taken by Governor Newsom to alleviate housing concerns and increase PPE and testing for agricultural workers. After formal requests were made for executive action in March and April, Governor Newsom announced in July the Housing for the Harvest program to provide temporary isolated living spaces for sick or at-risk farmworkers, and also announced his administration would be stepping up efforts to provide farmworkers with more PPE and testing for COVID-19... The release cited recent studies showing Monterey County farmworkers are three times as likely to contract COVID-19 compared to the general population, and that the Latinx community accounts for 93% of positive cases in the county while only comprising 61% of the population. (CAAA)

On September 17, 2020, Governor Newsom signed two pieces of legislation related to workers and workers' compensation; Senate Bill 1159 (Hill), which creates new workers’ compensation presumptions for COVID-19 infections, and Assembly Bill 685 (Reyes), which requires employers to report outbreaks of COVID-19 to local health officials. SB 1159 has an urgency clause, and therefore its provisions go into effect immediately. The text of the bills can be found here:...Continue reading

On Sept. 17, 2020, Gov. Gavin Newsom signed into law SB 1159, which establishes a rebuttable presumption that illness or death resulting from COVID-19 is compensable for front-line workers and employees who contract COVID-19 due to a workplace outbreak.[1] At the same time, Gov. Newsom signed AB 685, which, among other things, requires employers who receive notice of potential exposure to COVID-19 to provide specified notifications to their employees within one business day o...Continue reading

CA SUPREME COURT ISSUES DECISION RE WORKERS' COMPENSATION AND PEACE OFFICERS Gund v. County of Trinity: Application of the Exclusive Remedy Rule to Members of the Public Assisting in Active Law Enforcement On Aug. 27, 2020, in Gund v. County of Trinity, the California Supreme Court issued a decision that highlights what injured workers must give up as part of the compensation bargain....Continue reading

State lawmakers are considering three separate bills, all of which will be heard in their respective Appropriations Committees in the next two weeks, that would establish various levels of workers’ compensation presumptions for essential workers who contract COVID-19 on the job. Here are some key facts they should consider when casting their votes. Workers’ compensation claims are down overall in 2020. According to recent data from the California Workers’ Compensation Institu...te (CWCI), claims are down 29 percent for the first six months of 2020 compared to the first six months of 2019. Reported claims as of June 30 totaled 241,969 compared to 339,796 reported in the first half of 2019. Overall claims have not increased due to COVID-19. The CWCI data shows 14,487 COVID-19 claims had been filed as of July 6, which were included in the overall count above and account for only 6 percent of claims reported this year. The denial rate for COVID-19 claims is over three times as high as the denial rate for non-COVID-19 claims. Per the CWCI, the denial rate for COVID-19 claims for the first half of the year was 25 percent compared to 8 percent for claims not involving COVID-19. Lastly, as we reported two weeks ago, payers don’t anticipate COVID-19 costs to be a problem. Health Strategy Associates, a national health industry consulting firm led by Principal Joseph Paduda, conducted a recent survey, which concluded: When it comes to COVID-19 claims, the report found that they are typically inexpensive. One survey respondent estimated that 96 percent of claims cost less than $3,500. Another respondent reported that 3.8 percent of COVID-19 claims accounted for the vast majority of coronavirus-related costs. One more key fact to consider: currently, there is no COVID-19 presumption in place for essential workers. Governor Newsom’s rebuttable presumption expired July 5, placing the burden of proof on employees who continue to put their lives on the line during this pandemic. The state legislature should remember these facts and take appropriate action to enact a presumption that protects as many essential workers as possible.

This is crazy! A party for me! But only I’m invited because of Covid-19. Sorry, friends and family.

With the rebuttable presumption enacted by Governor Newsom having expired on July 5, millions of essential workers are counting on the state legislature to act quickly to pass new protections as COVID-19 cases continue in California. As the legislature reconvenes this week, efforts are underway to extend or establish a new rebuttable presumption for workers’ compensation benefits should an essential employee become infected with COVID-19 on the job. According to the UC Berkel...ey Labor Center, in 8 of the top 15 essential occupations, over 50 percent of those frontline jobs are low-wage. For farmworkers, janitors and building cleaners, cashiers and personal care aides, the percentage of low-wage jobs in those occupations is 71 percent or higher. These workers are putting their lives on the line every day to keep our communities functioning. It’s imperative we enact a presumption as soon as possible to ensure these Californians are covered under workers’ compensation and can receive prompt medical treatment.

The Workers’ Compensation Insurance Rating Bureau (WCIRB) released its 2020 State of the System report on July 14 showing unprecedented stability leading into challenges of the COVID-19 pandemic which will position profitable insurance companies to weather any potential storm quite well. For the seventh consecutive year, insurers saw a combined loss and expense ratio below 100 percent, and in 2018 saw their average return on net worth increase to 14.3 percent, up from 9.9 ...percent in 2017. Meanwhile, employers now have an average charged rate for workers’ compensation insurance lower than in 1973. While the profits keep rolling in, the WCIRB targets cumulative trauma (CT) claims, permanent disability claims and high rates of representation and litigation on claims as key factors in rising frictional costs. However, a 2018 report from Lockton Analytics shows that claim denials are a major driving force of increased costs in California with much higher costs associated with denying claims compared to claims that are initially accepted with the provision of immediate benefits and medical treatment. On average, 67 percent, or two thirds, of initial denials converted to paid claims within about 12 months, according to Lockton Analytics data. The study also found that there is a substantial increase about 55 percent in the cost of a claim initially denied and then paid out. In addition, expenses paid out on denied claims are close to triple the amount of non-denied claim expenses. When an injured worker is faced with the adversarial position taken by a claims department or defense attorney in denying their claim, their only recourse for help is to seek legal representation. Complex claims are more likely to be denied because of the costs involved. Permanent disability claims are more likely to be denied because of the costs involved. CT claims are more likely to be denied. In its’ October 2018 report on CT claims, the WCIRB confirmed that over 70 percent of CT claims are initially denied in whole or part. While the WCIRB continues to blame workers and the valid claims they file, all data seems to correlate with claims behavior in California which is skewed to denying claims rather than paying benefits upfront, making claims significantly more expensive. Perhaps the WCIRB should focus on the state of denial pervading California’s workers’ compensation system as the real culprit of higher costs instead of targeting workers who continue to [have their claims denied].

The Workers' Compensation Insurance Rating Bureau (WCIRB) released their 2019 California Workers' Compensation Losses and Expenses report last week showing continued profits for insurers as combined losses and expenses declined by roughly $100 million. Overall, California insurers paid $13.2 billion in combined losses and expenses in 2019, down slightly from $13.3 billion in 2018. Medical payments and expenses were estimated to be $4.6 billion in 2019, unchanged from 2018. T...he combined loss and expense ratio was 82 percent of earned premium, the fifth consecutive year below 100, further increasing insurer profits. The WCIRB estimates an underwriting profit of $2.9 billion, or 18 percent of premium, in 2019 compared to $4.1 billion, or 23 percent of premium, in 2018. Medical payments made to treat injured workers were down for categories such as hospital services for inpatient and outpatient procedures (which accounted for 31 percent of provider services), medical supplies and equipment, medical liens and pharmaceuticals. Payments made directly to injured workers increased to $1.47 billion, up slightly from $1.44 billion in 2018. Meanwhile, insurers’ average charged rate per $100 of covered payroll for California workers’ compensation policies fell to $2.00 in 2019, continuing a trend of decreases since the recent peak of $2.98 in 2014. What do these numbers tell us? Insurers are raking in billions and employers are saving money on premiums while workers are having their medical claims denied and delayed in the name of reducing costs and increasing the bottom line. What's even more interesting is that the WCIRB continues to target cumulative trauma (CT) claims as a growing concern and major determinant of workers' compensation costs. But according to this latest report, total reported losses on permanent disability claims associated with "carpel tunnel/repetitive motion," "other cumulative injuries" and "psychiatric and mental stress injuries" (also a form of cumulative trauma) only accounted for a combined total of 13 percent of losses in 2017. Estimated costs per claim were also significantly lower for these types of injuries compared with specific slip-and-fall or back injuries. As long as California’s insurers are more interested in perpetuating the status quo of profits before people, workers ... are unable to get the care they need to heal, get back to work, and provide for their families.

The Workers’ Compensation Insurance Rating Bureau (WCIRB) released a report last week detailing the historic impacts of recent economic downturns on California’s workers’ compensation system and it seems they’re using this pandemic as an opportunity to attack cumulative trauma (CT) claims. The report notes that while overall claim frequency has decreased more in years of economic recession than in years of economic expansion, the rate of cumulative trauma claims has increase...d during economic downturns. In an analysis of the number of claims dating back to 2012, the WCIRB found that about 25 post-termination CT claims were filed for every 1,000 jobs lost. The report then uses these numbers to estimate the number of CT claims that may be filed over the next year in correlation with the job losses incurred as a result of the COVID-19 pandemic. If only 50 percent of the rate of post-termination claims is applied to the 4.3 million Californians who have lost jobs since the start of the COVID-19 pandemic, about 54,000 post-termination claims could be filed over the next year, increasing statewide indemnity claim frequency by approximately 25 percent, the report states in its executive summary. However, when examining the correlation of unemployment rates to cumulative trauma claims, there is no basis for this new WCIRB doomsday scenario. In 2018, California had an unemployment rate of 4.4 percent and 54,000 cumulative trauma injury claims. In 2011, California had an unemployment rate of 12.1 percent and 54,000 cumulative trauma injury claims. Three times as much unemployment and the same number of cumulative trauma claims. So, assuming California will see an average unemployment rate of 20 percent this year, if an 8 percent difference in unemployment from 2011 to 2018 didn’t change the number of cumulative trauma injuries, why is the WCIRB speculating that an 8 percent difference between 2011 and 2020 will cause a dramatic jump? Looks like they’re at it again with the alarmist numbers, much like they did with their recent COVID-19 presumption estimates, trying to weaken the workers’ compensation system just when workers need it most.

Insurers have been crying foul over Governor Newsom’s executive order enacting a rebuttable presumption for frontline workers who contract COVID-19 on the job. Based on their recent performance and profit margins, it’s more like they’re crying wolf. The COVID-19 pandemic could not have come at a better time for the workers’ compensation insurance industry, said the National Council on Compensation Insurance at the Annual Issues Symposium earlier this month. Donna Glenn, Chi...ef Actuary for the National Council on Compensation Insurance, added that thanks to unprecedented financial strength and consistent performance in recent years, the U.S. comp system is well positioned to face the COVID-19 stress. Other Symposium highlights included: Even the worst scenarios should not spell doom for the industry because of near-record profits in 2019 and eye-popping reserve funding available. Pretax operating gain again reached 26% in 2019, the same as 2018. That’s three times the 20-year average of 8.1%. Investment gains on workers’ compensation insurance transactions topped 11% in 2019. And for California, the Workers’ Compensation Insurance Research Bureau says: Reforms since 2012 have saved $3 billion annually. Medical costs per claim decreased by 24% from 2012 through the first half of 2019. Average return on net worth in 2017 is 9.9% comparable to the countrywide average. Meanwhile, frontline workers continue to risk their lives to keep us safe and protected as the coronavirus pandemic continues. They deserve to know they’ll be protected should they become infected with COVID-19 on the job. The insurance industry is certainly well-heeled enough to protect them.