Efforts to give Illinois employers the right to direct the care of injured workers through preferred provider programs (PPPs), that state's version of medical networks, is moving forward through the regulatory process with hearings set later this month to debate proposed regulations.
House Bill 1698, the workers’ compensation reform measure passed by Illinois lawmakers this year and signed by Gov. Pat Quinn, allows the state's employers to use PPPs, subject to two basic requirements: The PPP must be approved by the Illinois Department of Insurance (DOI), and the Illinois Workers’ Compensation Commission must approve a notification form to be provided to an employee at the time of injury, advising the employee of the PPP, and that he or she has the right to opt out of the program.
The bill also calls for compressing the state’s 29 geozips (an area in which all ZIP codes share the same first three digits) into four regions for non-hospital medical fees and provides for 14 geographic areas for hospitals. The bill also included provisions for a 30% reduction in the medical fee schedule, which took effect on Sept. 1.
Anjali Julka, communications manager for the DOI, told WorkCompCentral that since HB 1698 became effective on June 28, the department has held a series of meetings with workers' compensation stakeholders concerning the provider networks.
Julka told WorkCompCentral that the DOI is modifying its current regulations (50 Illinois Administrative Code Section 2051) relating to preferred provider programs to address the workers' compensation PPP requirements contained in HB 1698.
DOI has thus far received five applications for PPPs and it is hoped that they will begin operations in early 2012.
Jay Shattuck, executive director of the Employment Law Council of the Illinois Chamber of Commerce, told WorkCompCentral that injured workers will benefit by being directed to health care providers who specialize in treating workers’ compensation cases, while employers will benefit from improved return-to-work rates and lower overall treatment costs.
The key to PPP success in Illinois will be whether the focus of the regulations and the employers that establish networks is on value returned rather than just cost cutting.
Illinois employers need to make sure they learn the lessons from other states that have implemented networks to understand what works and doesn't work.
Specifically what works is ensuring that physicians are paid fairly and reasonably, but also held accountable to established treatment standards and protocol where outcomes are measured and assessed, to ensure the highest quality care in the first 6 months of a claim and high return to work rates.
What doesn't work is early cost containment strategies focused on procedure expenses separate and apart from the overall medical picture.
Illinois is in an enviable position to learn from early adopter states and may be able to show the rest of the nation how to do medical networks right. We'll see over the next few years whether people can actually learn from others past experiences.
Tuesday, October 11, 2011
Monday, October 10, 2011
CA's Brown Message - Reform in Total, or Don't
California Governor Jerry Brown has always been known to be relatively unpredictable and not one to tow the party line.
And so it is with workers' compensation.
Presented with a host of bills for signature, the Democratic governor vetoed those that many would have thought a liberal would sign.
His veto message to AB 947, that would have have allowed up to 240 weeks of temporary disability benefits for injured workers who are still recovering from surgery when the current 104-week cap is exhausted, may be indicative of some near future for California workers' compensation:
"It is vital that injured workers receive adequate compensation to provide for their needs when they are unable to work due to work-related injuries. Workers' compensation reforms, however, need to be addressed on a broad and balanced scale -- ensuring workers receive adequate and timely benefits and treatment, while also ensuring that the costs of the system are sustainable."
With respect to AB 211, which would have made $6,000 supplemental job displacement vouchers available to injured workers when the treating physician determines the injury is permanent and stationary and there will be some degree of permanent disability, Brown said, "I am however, reluctant to enact piecemeal changes to the workers' compensation system in the absence of more comprehensive reform that addresses both the cost and benefits under the system."
It was a bit curious that Brown vetoed AB 584, which would have limited utilization review to physicians licensed in California.
Brown said in his veto message that limiting utilization review to California-licensed physicians would be an abrupt change and incompatible with how utilization review is conducted by health care service plans.
"I am not convinced that establishing a separate standard for workers' compensation utilization review makes sense," Brown wrote.
Even AB 1155, which would have interposed additional language in the apportionment statute for the purpose of preventing discrimination on the basis of “immutable characteristics” such as race, gender, sexual orientation etc. was vetoed by the Governor.
Brown did sign Assembly Bill 378 which will bring compound drugs under the state's pharmacy fee schedule and Senate Bill 684, which will require insurers to provide written disclosure to California employers if the carrier includes in the employer's policy a provision that requires disputes to be arbitrated or resolved in courts outside of California.
Brown's executive theme appears to be that workers' compensation in California should be treated in its totality, and that provisions catering to special interests won't be allowed in isolation.
In other words, only tit for a tat will be considered under the Brown Administration.
WorkCompCentral
And so it is with workers' compensation.
Presented with a host of bills for signature, the Democratic governor vetoed those that many would have thought a liberal would sign.
His veto message to AB 947, that would have have allowed up to 240 weeks of temporary disability benefits for injured workers who are still recovering from surgery when the current 104-week cap is exhausted, may be indicative of some near future for California workers' compensation:
"It is vital that injured workers receive adequate compensation to provide for their needs when they are unable to work due to work-related injuries. Workers' compensation reforms, however, need to be addressed on a broad and balanced scale -- ensuring workers receive adequate and timely benefits and treatment, while also ensuring that the costs of the system are sustainable."
With respect to AB 211, which would have made $6,000 supplemental job displacement vouchers available to injured workers when the treating physician determines the injury is permanent and stationary and there will be some degree of permanent disability, Brown said, "I am however, reluctant to enact piecemeal changes to the workers' compensation system in the absence of more comprehensive reform that addresses both the cost and benefits under the system."
It was a bit curious that Brown vetoed AB 584, which would have limited utilization review to physicians licensed in California.
Brown said in his veto message that limiting utilization review to California-licensed physicians would be an abrupt change and incompatible with how utilization review is conducted by health care service plans.
"I am not convinced that establishing a separate standard for workers' compensation utilization review makes sense," Brown wrote.
Even AB 1155, which would have interposed additional language in the apportionment statute for the purpose of preventing discrimination on the basis of “immutable characteristics” such as race, gender, sexual orientation etc. was vetoed by the Governor.
Brown did sign Assembly Bill 378 which will bring compound drugs under the state's pharmacy fee schedule and Senate Bill 684, which will require insurers to provide written disclosure to California employers if the carrier includes in the employer's policy a provision that requires disputes to be arbitrated or resolved in courts outside of California.
Brown's executive theme appears to be that workers' compensation in California should be treated in its totality, and that provisions catering to special interests won't be allowed in isolation.
In other words, only tit for a tat will be considered under the Brown Administration.
WorkCompCentral
Friday, October 7, 2011
The State Fund's Unfortunate Move is the Right Decision
The California State Compensation Insurance Fund yesterday announced it plans to lay off 25% of its workforce next year -- between 1,500 and 1,800 workers. A business move that can not be unexpected due to both the workers' compensation insurance market in the state and the general economy.
At the height of the workers' compensation insurance "crisis" the State Fund saw its market share grow to a high of 53% in 2005. The latest numbers available from the California Department of Insurance has the State Fund at 16% of the market.
In addition to recovered capacity in the California market, the shrinking economy withdrew a large portion of the State Fund's premium base.
According to data published on Sept. 20 by the Workers' Compensation Insurance Rating Bureau written premium in California dropped 58% to $9.8 billion in 2010 from $23.5 billion in 2004.
State Fund's loss expense ratio last year was 166.2%, according to the carrier's 2010 annual report. State Fund reported loss adjustment expenses of $1.888 billion and earned premiums of $1.136 billion last year.
In 2009, the company had a loss expense ratio of 151.4%, with $1.889 billion in loss-adjustment expenses and earned premiums of $1.248 billion.
Nicole Mahrt, a spokeswoman for the Association of California Insurance Companies, told WorkCompCentral that in 2010 the combined ratio for private insurers in California was 128%, of which about 46% was loss-adjustment expenses.
The State Fund has a disproportionate influence on the statistics reflecting the California workers' compensation market and when the numbers are presented by national rating or industry analysis organizations, such as NCCI or WCRI, the State Fund is routinely asterisked with associated precautionary notes concerning its impact on the numbers.
Indeed, though only operating in one state, the State Fund at $1.136 billion in premium is still one of the largest workers' compensation insurance companies in the nation, and certainly by far the largest state fund.
But while the State Fund is a creature of statute, it receives no funding from the state and it must compete against private insurance, so it must make prudent business decisions and with its loss and expense ratios so high failure to trim expenses would otherwise threaten the entire workers' compensation market.
While it is a shame the State Fund's business move will contribute to the stubborn unemployment rate in California, it is a move that will otherwise benefit the State of California's businesses - at least until the next "crisis".
WorkCompCentral
At the height of the workers' compensation insurance "crisis" the State Fund saw its market share grow to a high of 53% in 2005. The latest numbers available from the California Department of Insurance has the State Fund at 16% of the market.
In addition to recovered capacity in the California market, the shrinking economy withdrew a large portion of the State Fund's premium base.
According to data published on Sept. 20 by the Workers' Compensation Insurance Rating Bureau written premium in California dropped 58% to $9.8 billion in 2010 from $23.5 billion in 2004.
State Fund's loss expense ratio last year was 166.2%, according to the carrier's 2010 annual report. State Fund reported loss adjustment expenses of $1.888 billion and earned premiums of $1.136 billion last year.
In 2009, the company had a loss expense ratio of 151.4%, with $1.889 billion in loss-adjustment expenses and earned premiums of $1.248 billion.
Nicole Mahrt, a spokeswoman for the Association of California Insurance Companies, told WorkCompCentral that in 2010 the combined ratio for private insurers in California was 128%, of which about 46% was loss-adjustment expenses.
The State Fund has a disproportionate influence on the statistics reflecting the California workers' compensation market and when the numbers are presented by national rating or industry analysis organizations, such as NCCI or WCRI, the State Fund is routinely asterisked with associated precautionary notes concerning its impact on the numbers.
Indeed, though only operating in one state, the State Fund at $1.136 billion in premium is still one of the largest workers' compensation insurance companies in the nation, and certainly by far the largest state fund.
But while the State Fund is a creature of statute, it receives no funding from the state and it must compete against private insurance, so it must make prudent business decisions and with its loss and expense ratios so high failure to trim expenses would otherwise threaten the entire workers' compensation market.
While it is a shame the State Fund's business move will contribute to the stubborn unemployment rate in California, it is a move that will otherwise benefit the State of California's businesses - at least until the next "crisis".
WorkCompCentral
Thursday, October 6, 2011
NY Showing How Much Politics Influences Science
The current debate in New York regarding the development of medical treatment guidelines shows just how much politics is involved in medicine, and just how little science actually steers the debate.
The New York State Workers' Compensation Board (SWCB) began working on the state's first medical treatment guidelines through a 14-member Medical Advisory Committee appointed by SWCB Chairman Robert Beloten.
When he signed a series of workers' compensation reforms into law on March 13, 2007, former Gov. Eliot Spitzer directed the New York State Insurance Department to assemble a task force of doctors to come up with an initial set of guidelines and to explore what other types of injuries should be addressed.
While the Insurance Department task force was finishing work on the proposed carpal tunnel syndrome guides last May, Beloten announced his own initiative on chronic pain and created the Medical Advisory Committee to keep the guides current and on track with "evolving medical knowledge."
The panel includes three doctors nominated by the Business Council, three nominated by the AFL-CIO, three picked by Beloten, and one non-medical representative each from the union and the Business Council.
In addition, the committee is co-chaired by the board's medical director, Dr. Jaime Szeinuk of Mt. Sinai Medical Center, and SWCB Associate Medical Director Elain Sobol-Berger.
Work on the treatment rules for chronic pain and carpal tunnel syndrome has rekindled debate over which injured workers should be covered. The issue is whether the rules are to be applied prospectively only, or whether they should be applied to all injuries and illnesses – no matter when they occurred.
This is particularly an acute issue with chronic pain victims since, by definition, these are long term treatment cases.
The debate is steered by non-medical political interests.
The AFL-CIO, claimant's attorneys, the Medical Society of New York State, and the New York State Chiropractic Association argue that applying the guides to injuries and illnesses occurring before rule adoption will cut off long-term treatment for workers with chronic conditions predating the guidelines.
Both the American Insurance Association and the Business Council argue that limiting the application of the guidelines to new injuries and illnesses would create two classes of injured workers in New York.
One would think that the answer is simple - what does the science say?
Chiropractic, physical therapy, and other physical medicines have their place in the treatment regiment, but not necessarily over the long term. Chronic pain patients can be treated, and if they're on long term prescriptions for pain medication then there should be adequate guidelines to cope with the cessation of non-beneficial therapy (i.e. opioids or other long-term destructive medications) and transfer of care to other pain treatment protocol.
From my perspective, this is a no-brainer. Just because something has been does not mean it should be in the future.
The old joke of the patient telling his doctor that it "hurts when I do this", and the doctor responding, "then don't do that" seems particularly applicable in the politics of defining workers' compensation treatment guidelines.
WorkCompCentral
The New York State Workers' Compensation Board (SWCB) began working on the state's first medical treatment guidelines through a 14-member Medical Advisory Committee appointed by SWCB Chairman Robert Beloten.
When he signed a series of workers' compensation reforms into law on March 13, 2007, former Gov. Eliot Spitzer directed the New York State Insurance Department to assemble a task force of doctors to come up with an initial set of guidelines and to explore what other types of injuries should be addressed.
While the Insurance Department task force was finishing work on the proposed carpal tunnel syndrome guides last May, Beloten announced his own initiative on chronic pain and created the Medical Advisory Committee to keep the guides current and on track with "evolving medical knowledge."
The panel includes three doctors nominated by the Business Council, three nominated by the AFL-CIO, three picked by Beloten, and one non-medical representative each from the union and the Business Council.
In addition, the committee is co-chaired by the board's medical director, Dr. Jaime Szeinuk of Mt. Sinai Medical Center, and SWCB Associate Medical Director Elain Sobol-Berger.
Work on the treatment rules for chronic pain and carpal tunnel syndrome has rekindled debate over which injured workers should be covered. The issue is whether the rules are to be applied prospectively only, or whether they should be applied to all injuries and illnesses – no matter when they occurred.
This is particularly an acute issue with chronic pain victims since, by definition, these are long term treatment cases.
The debate is steered by non-medical political interests.
The AFL-CIO, claimant's attorneys, the Medical Society of New York State, and the New York State Chiropractic Association argue that applying the guides to injuries and illnesses occurring before rule adoption will cut off long-term treatment for workers with chronic conditions predating the guidelines.
Both the American Insurance Association and the Business Council argue that limiting the application of the guidelines to new injuries and illnesses would create two classes of injured workers in New York.
One would think that the answer is simple - what does the science say?
Chiropractic, physical therapy, and other physical medicines have their place in the treatment regiment, but not necessarily over the long term. Chronic pain patients can be treated, and if they're on long term prescriptions for pain medication then there should be adequate guidelines to cope with the cessation of non-beneficial therapy (i.e. opioids or other long-term destructive medications) and transfer of care to other pain treatment protocol.
From my perspective, this is a no-brainer. Just because something has been does not mean it should be in the future.
The old joke of the patient telling his doctor that it "hurts when I do this", and the doctor responding, "then don't do that" seems particularly applicable in the politics of defining workers' compensation treatment guidelines.
WorkCompCentral
Wednesday, October 5, 2011
CA Medical Director Position Will be Tough to Fill
The California Division of Workers' Compensation (DWC) Medical Director position has been vacant now for around 3 years, and despite recruitment efforts the DWC has received only one application.
New Administrative Director (AD), Rosa Moran, has her hands full with huge challenges, but one of the biggest challenges is finding qualified people to do the various jobs necessary to run the DWC.
This is particularly acute when the state, despite its independently "user funded" Workers' Compensation Revolving Fund, is on austerity budgeting that doesn't permit flexibility in staffing (i.e. hiring).
Besides cache (and that may be overstated), the DWC Medical Director position is labor intensive and requires extraordinary skill, schooling and knowledge - probably more so than most any other position in state government.
And the government is competing not only against private industry that hires its own medical directors, but against the various other career options physicians have, options that more often than not are less stressful and more lucrative.
In addition, the character of a qualified physician just won't permit that person to assume a nine to five work mentality. That person is going to be consumed with the job and likely will not feel good about doing the job unless they are working it 50 to 60 hours a week.
Navigating the various constituencies within the system while attempting to uphold the promise of expediency in workers' compensation is a highly stressful part of the Medical Director job, adding to the unattractiveness of the position.
Moran, in an interview this past August, realized the rock and hard place position she is in regarding the Medical Director position, telling former Chief Judge of the Oakland District Office Kenneth Peterson:
"Part of the problem with the Medical Director position has been the salary. We are having trouble recruiting candidates because qualified doctors are unwilling to give up lucrative practices. We are looking at the possibility of a part-time position, so a doctor could retain at least a portion of a private practice. There would have to be a way to avoid conflicts of interest, as the Medical Director could not be a QME. We may need to change the position description so we can get a good person on board."
According to salary.com, the median salary for a Medical Director in Oakland (which is where DWC headquarters is located) is nearly $250,000 per year.
The Sacramento Bee website has an interactive tool for comparing state civil service employee salaries as filed with the state Controller's office. The top five salaries are over $1.7 million, the top being $2.3 million, and three of those positions are for college coaches. The top salaries in the Department of Industrial Relations are more than 12 times less financially rewarding than the head coach at UC Berkeley!
Yes, the State of California deems college athletics more important than the health, safety and welfare of its 16 million workers.
And good luck finding a physician to take the Medical Director job at the salary available.
I wish I had an answer for Moran and the state. The Medical Director position is a critical one for the success of the California workers' compensation system, but obviously the system can function, albeit anemically, without one as it has for the last three years.
Honestly though, the Medical Director position will likely remain vacant until the Governor either removes the Executive Order that imposes budgetary restrictions on all of state government or exempts the DWC from it.
WorkCompCentral
New Administrative Director (AD), Rosa Moran, has her hands full with huge challenges, but one of the biggest challenges is finding qualified people to do the various jobs necessary to run the DWC.
This is particularly acute when the state, despite its independently "user funded" Workers' Compensation Revolving Fund, is on austerity budgeting that doesn't permit flexibility in staffing (i.e. hiring).
Besides cache (and that may be overstated), the DWC Medical Director position is labor intensive and requires extraordinary skill, schooling and knowledge - probably more so than most any other position in state government.
And the government is competing not only against private industry that hires its own medical directors, but against the various other career options physicians have, options that more often than not are less stressful and more lucrative.
In addition, the character of a qualified physician just won't permit that person to assume a nine to five work mentality. That person is going to be consumed with the job and likely will not feel good about doing the job unless they are working it 50 to 60 hours a week.
Navigating the various constituencies within the system while attempting to uphold the promise of expediency in workers' compensation is a highly stressful part of the Medical Director job, adding to the unattractiveness of the position.
Moran, in an interview this past August, realized the rock and hard place position she is in regarding the Medical Director position, telling former Chief Judge of the Oakland District Office Kenneth Peterson:
"Part of the problem with the Medical Director position has been the salary. We are having trouble recruiting candidates because qualified doctors are unwilling to give up lucrative practices. We are looking at the possibility of a part-time position, so a doctor could retain at least a portion of a private practice. There would have to be a way to avoid conflicts of interest, as the Medical Director could not be a QME. We may need to change the position description so we can get a good person on board."
According to salary.com, the median salary for a Medical Director in Oakland (which is where DWC headquarters is located) is nearly $250,000 per year.
The Sacramento Bee website has an interactive tool for comparing state civil service employee salaries as filed with the state Controller's office. The top five salaries are over $1.7 million, the top being $2.3 million, and three of those positions are for college coaches. The top salaries in the Department of Industrial Relations are more than 12 times less financially rewarding than the head coach at UC Berkeley!
Yes, the State of California deems college athletics more important than the health, safety and welfare of its 16 million workers.
And good luck finding a physician to take the Medical Director job at the salary available.
I wish I had an answer for Moran and the state. The Medical Director position is a critical one for the success of the California workers' compensation system, but obviously the system can function, albeit anemically, without one as it has for the last three years.
Honestly though, the Medical Director position will likely remain vacant until the Governor either removes the Executive Order that imposes budgetary restrictions on all of state government or exempts the DWC from it.
WorkCompCentral
Tuesday, October 4, 2011
Texas is Doing Something Right - But What?
The Texas work comp system is subject to a unique "report card" process where the Department of Insurance (DOI) uses data supplied by carriers and the Division of Workers' Compensation (DWC) to evaluate the performance of the state's system.
One of the goals of the report card process is to measure the effectiveness of medical care provided injured workers, and the value returned to the system.
Texas measures not only the cost of treatment but also compares that to return to work rates and trends costs over time.
According to the report by the state Department of Insurance's Workers’ Compensation Research and Evaluation Group the average cost of medical care in Texas' workers' compensation system was higher for health care networks than for non-network care in 2010, but average medical costs in networks increased less after six months of services compared to non-network care, and networks had higher return-to-work rates for injured employees than did non-network employees.
This was a surprising conclusion to me. But assuming the accuracy of the report's conclusion, there is clearly something Texas is doing that other states should emulate.
There are 34 networks certified by the DOI, with coverage in 250 of Texas’ 254 counties. And there are two types of networks: networks operated by public entities under Chapter 504 of the Labor Code, which are not subject to many of the requirements for private employer networks operated under Chapter 1305 of the Insurance Code.
Networks were introduced into the Texas system with HB 7 in 2005. As with any new feature, there was quite a bit of consternation at the outset of the networks, with confusion about building them, operating them, etc. Now networks are more mainstream so the data measuring their effectiveness is more reliable and consistent.
Other findings in the report include:
The study is incomplete but provides direction for future studies. For instance, what is going on with Texas networks that provide better return to work results and better control over long term medical costs?
Regardless, the rest of the workers' compensation community needs to see what Texas is doing right, because its system costs on a relative scale (i.e. based on percentage of payroll, and other relative scales) are significantly less that its neighboring states, and other big states such as California, Florida and New York aren't even close.
For instance the average Texas loss cost proposed in the last NCCI loss cost filing is $0.66 per $100 of payroll, compared to $1.03 in the region (Arkansas, Louisiana, New Mexico and Oklahoma) and $0.93 countrywide.
What is also interesting is that Texas spends more on medical cost containment services than most states according to the Workers' Compensation Research Institute - I find this surprising because the traditional thought is that cost containment interferes with the delivery of medical care.
So the Texas study produced some surprising results, but really opens the door to more questions that need study - not only by Texans but other states as well.
WorkCompCentral
One of the goals of the report card process is to measure the effectiveness of medical care provided injured workers, and the value returned to the system.
Texas measures not only the cost of treatment but also compares that to return to work rates and trends costs over time.
According to the report by the state Department of Insurance's Workers’ Compensation Research and Evaluation Group the average cost of medical care in Texas' workers' compensation system was higher for health care networks than for non-network care in 2010, but average medical costs in networks increased less after six months of services compared to non-network care, and networks had higher return-to-work rates for injured employees than did non-network employees.
This was a surprising conclusion to me. But assuming the accuracy of the report's conclusion, there is clearly something Texas is doing that other states should emulate.
There are 34 networks certified by the DOI, with coverage in 250 of Texas’ 254 counties. And there are two types of networks: networks operated by public entities under Chapter 504 of the Labor Code, which are not subject to many of the requirements for private employer networks operated under Chapter 1305 of the Insurance Code.
Networks were introduced into the Texas system with HB 7 in 2005. As with any new feature, there was quite a bit of consternation at the outset of the networks, with confusion about building them, operating them, etc. Now networks are more mainstream so the data measuring their effectiveness is more reliable and consistent.
Other findings in the report include:
- All networks showed claims had shorter times for first non-emergency care than non-network claims.
- Network claims overall tended to show lower use of hospital services, but higher use of professional and pharmacy services, than non-network claims.
- All networks had lower use of physical medicine services.
- Interestingly, network employees overall reported lower levels of access to, and satisfaction with, medical care, but networks provided faster non-emergency care to their injured workers.
The study is incomplete but provides direction for future studies. For instance, what is going on with Texas networks that provide better return to work results and better control over long term medical costs?
Regardless, the rest of the workers' compensation community needs to see what Texas is doing right, because its system costs on a relative scale (i.e. based on percentage of payroll, and other relative scales) are significantly less that its neighboring states, and other big states such as California, Florida and New York aren't even close.
For instance the average Texas loss cost proposed in the last NCCI loss cost filing is $0.66 per $100 of payroll, compared to $1.03 in the region (Arkansas, Louisiana, New Mexico and Oklahoma) and $0.93 countrywide.
What is also interesting is that Texas spends more on medical cost containment services than most states according to the Workers' Compensation Research Institute - I find this surprising because the traditional thought is that cost containment interferes with the delivery of medical care.
So the Texas study produced some surprising results, but really opens the door to more questions that need study - not only by Texans but other states as well.
WorkCompCentral
Monday, October 3, 2011
Loan From UEBTF to Create More Bureaucracy
I've whined about this before, but the wheels of government continue to move, sometimes forward, sometimes backward.
California Gov. Jerry Brown on Friday signed AB 436 by Jose Solorio, D-Santa Ana, authorizing a $4.3 million loan from the Uninsured Employers Benefit Trust Fund (UEBTF) to establish a program for monitoring prevailing wages on public works projects.
The UEBTF is an employer-funded account that pays for benefits when employers are uninsured. It is financed through a tax on workers' compensation insurance policies and a separate assessment on self insured entities.
The UEBTF nearly became insolvent in September 2010, because more claims were filed than the Division of Workers' Compensation (DWC) anticipated. The division was not able to loan money to the trust at that time because a budget had not been approved. As a consequence thousands of claimants were almost left penniless.
DWC documents show assessments for insured employers increased from $22 million in 2010 to $44 million in 2011. Assessments for self-insured employers increased from $3.8 million to $13.5 million over the same period.
Good job government in taking care of it's population ... NOT!
AB 436 establishes a Compliance Monitoring Unit within the Department of Industrial Relations to make sure contractors are complying with prevailing wage requirements on public works projects. The legislation creates the State Public Works Enforcement Fund to pay for the department's monitoring efforts.
Brown signed AB 436 but did not include a signing message with the bill.
California Gov. Jerry Brown on Friday signed AB 436 by Jose Solorio, D-Santa Ana, authorizing a $4.3 million loan from the Uninsured Employers Benefit Trust Fund (UEBTF) to establish a program for monitoring prevailing wages on public works projects.
The UEBTF is an employer-funded account that pays for benefits when employers are uninsured. It is financed through a tax on workers' compensation insurance policies and a separate assessment on self insured entities.
The UEBTF nearly became insolvent in September 2010, because more claims were filed than the Division of Workers' Compensation (DWC) anticipated. The division was not able to loan money to the trust at that time because a budget had not been approved. As a consequence thousands of claimants were almost left penniless.
DWC documents show assessments for insured employers increased from $22 million in 2010 to $44 million in 2011. Assessments for self-insured employers increased from $3.8 million to $13.5 million over the same period.
Good job government in taking care of it's population ... NOT!
Maybe I'm missing something important here because I did not attend the hearings on this bill and don't understand the arguments for the bill, but it seems to me that that last thing we need is another regulatory agency placing additional burden on business while taking money away from a program that plays a very important role in today's economy - especially in today's economy.
Brown signed AB 436 but did not include a signing message with the bill.
Dean Fryer, a spokesperson for the Department of Industrial Relations, told WorkCompCentral in a Sept. 1 story that once funds from bond money come in, the Compliance Monitoring Unit will be self-sufficient and the "loan will be promptly paid back."
We'll see. Past history of government manipulation of public funds does not give me confidence.
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