Thursday, April 17, 2014

It's There; Give It Away

The Rand Center for Health and Safety in the Workplace issued a report a while back following the passage of California SB 863 about the $120 million slush fund.

If you recall, SB 863 was headed towards defeat until a last minute deal brokered literally in the halls of the legislature pitched an undefined fund of money paid for with an assessment on workers' compensation insurance policies and self insured deposits saved the day.

“We negotiated in the closing days and came to an agreement that there would be set aside annually $120 million to create an expeditious, non-judicial process for making sure those workers who can’t return to work get more of the benefit which they need,” Senate President Pro Tem Darrell Steinberg, D-Sacramento, said at the time.

The issue with this fund was that only the allocation of money, $120 million per year, was defined. All other details were left to the Department of Industrial Relations/Division of Workers' Compensation to define.

The administration then asked Rand what it thought.

Rand recommended a minimum three-year waiting period so injured workers are able to demonstrate a post-injury loss of earnings before being eligible for payments from the fund. During a Commission on Health and Safety and Workers’ Compensation hearing in October, Rand researcher Seth Seabury said they’re no way to get around the waiting period “if you want to base the benefits on actual losses.”

That opinion doesn't sit well with politicians.

Steinberg said he was worried that if the administration drafts regulations to implement the $120 million fund that are based on the methodology recommended by the Rand Center for Health and Safety in the Workplace, workers would face long delays before they received any money.

“Administrative and time-based hurdles” were not what he envisioned when negotiating the special fund, Steinberg said.

So David Lanier, secretary of the Labor and Workforce Development Agency (as yet unconfirmed by the Senate), said during a March 26 confirmation hearing that using the voucher to determine eligibility would avoid long delays in getting money into the hands of workers who have suffered significant earning losses as a result of their injuries.

“An alternative that’s come up is some sort of proxy for (identifying) who are these workers who are most financially impacted by their injury,” Lanier said.

He said the Rand study identified “a high level of correlation” between workers who don’t get a return-to-work offer from their original employer and those who have a disproportional loss of earnings.

Therefore, he said, the administration is seriously considering basing eligibility for the supplemental benefit on whether a worker has been offered employment following his injury. That is the same trigger that determines eligibility for the Supplemental Job Displacement Benefit voucher.

“It has the clear advantage of putting the money in the hands of the injured workers sooner,” he said.

Apparently according to reports this morning that is exactly what the administration intends to do.

The California Applicant Attorneys Association apparently likes the idea.

Jim Butler, president of CAAA, told WorkCompCentral that the several CAAA representatives who attended an April 4 invitation-only stakeholders meeting in Oakland support the division’s proposal.

“CAAA has been consistently urging a simple, expeditious method to appropriate these funds: allow all workers who receive a Supplemental Job Displacement Benefit voucher to apply for these funds and divide the total by the number of claimants in a year, with no one receiving more than $20,000,” he said. “CAAA leaders met with the DWC on April 4 to advocate for this method.”

This idea is going to rankle some folks because it is seen as a pure, simple, give away without much qualification.

But really, should anyone care?

The bottom line is that the administration has been collecting money for this slush fund. For many of us a couple extra thousand dollars doesn't mean a whole lot.

For many others it does.

And workers' compensation is called workers' compensation because it is about paying money to workers.

Let's get over the objection that there needs to be some huge qualifying procedure. The idea is to give away money, so just do it.

Why make the process of giving away money more expensive than it needs to be? This is only wealth re-distribution and if there's a system in place that can be used to make some administrative determinations then that is just fine.

I do commend the administration for taking its time to gather information, listen to arguments, and devise different plans and scenarios.

But when it really comes down to it, the discretion for putting together a system was left up to the administration. This does not have to be a complex process, nor was that intended.

So let's get over it - and if more people than forecast apply and obtain money from the fund, then bully for them. The money is there, and it is a finite, fixed sum. So long as employers aren't asked for even more because of demand then there should be no argument.

1 comment:

  1. As always, Dave, your no nonsense, common sense approach is appreciated. With all the post-863 procedural roadblocks that get in the way of getting benefits to injured workers it's nice to see that someone still remembers that this is a benefit delivery, not a benefit denial, system.