California legislative committees on Thursday and Friday passed bills that would reduce the time employers have to accept liability for certain workers’ compensation claims and extend by two more years the COVID-19 presumptions.
The Assembly Appropriations Committee on Thursday passed SB 1127, would reduce to 75 days from 90 days employers’ time to accept liability for claims for certain injuries that are presumed to be compensable.
The bill would also create a new penalty of up to $50,000 if the Workers’ Compensation Appeals Board finds that an employer unreasonably denied a claim for a presumptive injury. The measure would also allow firefighters and police officers to receive up to 240 weeks of temporary disability benefits for presumptive cancer claims, rather than the 1
04 compensable weeks of TD available to other injured workers.Proponents say the bill will “revise the unreasonable denial penalty provisions that were gutted under the brinksmanship reforms of 2004” and break down barriers in the workers’ compensation system that were “artificially constructed in the hope that the injured worker will settle for less than their claim is worth,” according to a bill analysis.
The analysis says the bill is likely to have a significant increase in the Division of Workers’ Compensation budget, but the extent is undetermined. Judges would likely experience increased workloads to adjudicate penalty disputes, the analysis says. And it’s difficult to project penalty revenue because the DWC is “not aware of evidence that unreasonable denials of liability for claims result in an unreasonable delay in benefits.”
The California Workers’ Compensation Institute released an analysis of the measure in July that suggested it could lead to more denials and litigation in complex cases.
“Provisional denials due to inability to obtain necessary records, complete the medico-legal process and other issues, including lack of cooperation with the investigation, will trigger more litigation as well as significant increases in allocated and unallocated loss adjustment costs related to the investigation period,” CWCI said.
CWCI also said some provisions of the bill are in direct conflict with another measure before lawmakers this year that would extend covid-19 presumptions passed in 2020.
Under AB 1751, which passed the Senate Appropriations Committee on Thursday, employers would have 30 days to accept liability for COVID-19 claims submitted by first responders, nurses and other healthcare workers, and 45 days to accept liability for claims from other workers.
That bill would also extend to Jan. 1, 2025, the expiration date of the covid-19 regulations that are currently scheduled to expire at the end of this year.
WorkCompCentral is a sister magazine to Business Insurance. More stories here.
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