Three years after state lawmakers reformed the workers compensation system resulting in savings for business owners, a ballot initiative to make changes to the law is in the signature-gathering stage. If supporters gather the necessary signatures by the Sept. 10 deadline, the initiative that had been dubbed the Fair Medical Treatment for Workers Act will go before voters in the November election. San Fernando Valley business people and business organizations strongly oppose any changes to the law, saying the reforms kept businesses in California and saved jobs. “The workers comp reform was a bi-partisan compromise and in a compromise everyone has to give in a little bit,” said Brendan Huffman, head of the Valley Industry & Commerce Association. “That is what happened and the rates have gone down.” The changes proposes by William Morris, an attorney in Turlock specializing in worker’s compensation claims, would allow injured workers to choose the physician giving treatment; end current requirements for prior insurer or employer authorization of treatment recommendations; and provides for payment of treatment within 60 days. The ballot initiative goes to the heart of what workers’ comp is all about the injured worker receiving medical treatment, said Morris. The reforms passed by state legislators didn’t change anything, continuing a situation where an insurance company can cut off medication, or deny treatment or necessary equipment, Morris said. “Guess who pays for that when insurance company doesn’t?” Morris asked. Lawmakers passed a first series of reforms in 2003 and followed again the following year after Gov. Arnold Schwarzenegger and top leaders from the Assembly and Senate hammered out additional measures. The reforms established medical treatment guidelines, lowered permanent disability payments and took other steps to root out fraud and abuse in the system. Before the reforms, the system was easy to take advantage of, said Dan Stillwell, CEO of LAgraphico in Burbank. “They’ve made it more difficult but it’s still vulnerable to something that is claimed, whether true or not,” Stillwell said. When Schwarzenegger signed the legislation into law he pledged billions would be saved by businesses having their workers’ compensation insurance rates decrease. That pledge has been met. The American Insurance Institute reported in May 2006 that the reforms have put $8 billion back into the state’s economy. The Legislative Analyst’s Office reported that decreases totaled around $20 billion in 2006 for all employers in the state. Contributing to the decrease are business owners like Scott Allyn of Electronic Source Co. in Van Nuys, who saw his worker’s comp insurance premium drop 20 percent in 2006 and expects a similar number this year. At LAgraphico, Stillwell reported a 50 to 60 percent savings. The weekly insurance cost for Box Brothers, Inc. can be in the neighborhood of $2,000, said Mark Frydman, president of the Woodland Hills moving supplies business. “If I were paying the same premium I was paying three years ago, I would have to lay people off because I wouldn’t be able to afford to stay in business,” Frydman said. Morris counters the savings argument by saying nobody has taken a look at the cost of workers’ comp-related litigation since the reforms were passed; and that savings have been realized through denial of treatment that eventually gets picked up by the taxpayers. The action taken by Morris has set off countermeasures by the business community. VICA is cautioning its members not to sign the petitions that would undo the reforms, Huffman said. The California Chamber of Commerce leads a coalition against the initiative and stands ready to do what is necessary to keep it from passing if it makes it to the ballot. The group, however, will not actively tell its membership not to sign the petition, said chamber spokesman Vince Sollitto. “I suspect the ballot language itself explains why it’s bad,” Sollito said. In the early weeks after the initiative was approved by the Secretary of State’s office, the only signatures gathered had been by Morris himself. He did have reports of others collecting signatures and expected to receive those in the near future, Morris said. Workers’ Compensation Insurance Average Insurer Rate per $100 of Payroll July 2004 – $5.91 Jan. 2005 – $5.37 July 2005 – $4.52 Jan. 2006 – $3.77 July 2006 – $3.21
