Only a few months ago, or so it seemed, discussion of California’s permanent disability benefit adequacy was put on hold until a series of studies from the Division of Workers’ Compensation were completed. The various studies were completed, apparently, in May, or so we would believe from looking at the Division’s website.
But by the end of the legislative session, all that had come from these data were a few inconclusive and sometimes heated meetings among stakeholders. Senate Bill 936 (Perata), a remake of earlier legislation that would double PD benefits, was ritually sent up to the governor and with equal rote application to the Chamber of Commerce, and its provisional wing, the Workers’ Compensation Action Network, sent out alarms to make sure the governor and his staff comprehended the profound angst that signing the bill would cause within the business community.
To no one’s surprise, the governor vetoed the bill. But his veto message tasked the Administrative Director of the Division “…to finalize her review of the new schedule and commence rulemaking as soon as possible to make any changes deemed necessary.” As soon as possible apparently doesn’t mean October – and it is beginning to look as if it doesn’t mean November, either. Apparently no new data are needed to base the revised schedule on and potential adjustments that could be made to the schedule have been widely distributed.
Consequently, the question appears to be not “when” but rather “how much.” While the workers’ comp community waits for this decision to be made, to an interest group it does what it always does – wildly speculate. Perhaps a PD increase is tied to a broader deal on health care reform? The broad range of labor opposition to the governor’s health care proposal makes that seem unlikely. Not all labor organizations look at workers’ comp disability benefit increases as a top priority – at least not this year. Perhaps more employer-related issues are in the mix, such as relief from rigid requirements of meal-and-rest obligations?
This issue has been a priority for a number of business organizations, but if critical mass was not reached during the regular session just completed, what would interest labor in coming back to a meal-and-rest deal?
Sometimes, workers’ comp issues suffer from overanalysis. The history of Republican administrations since Jerry Brown has been to fight labor at every opportunity. When it comes to workers’ comp, this administration is decidedly not “post-partisan.” The issue of how much money to put into PD, even the 10% increase mentioned by the Administrative Director resulting from revising existing formulas, may very well be to some a question of “why give labor anything?”
Add to this dynamic the fact that key decision-makers in the administration, including the governor, have been preoccupied over more pressing matters, such as fires in the Southland and the failing special sessions over water reform and health care.
As the 2008 session draws ever closer, and premiums begin to stabilize or potentially increase in January, the sense of urgency that surrounded permanent disability changes earlier this year has waned. Even if only the most basic changes are made to the schedule, those changes will not work their way into the system until well after the January 1, 2008 insurance renewal period. Time, it would appear, is on the administration’s side.
So, as you ponder when the new permanent disability rating schedule will emerge and the rulemaking process will commence, and as you question why the long delay, remember one thing: The schedule, right or wrong, is right on schedule.