Benefit increases for temporary disability

By CMTA Staff

Capitol Update, April 5, 2007 Share this on FacebookTweet thisEmail this to a friend

Many state legislators are in their districts this week for the spring recess, returning Monday, April 9.  That week, the bulk of the legislative work begins as bills take shape (amended with some substance) and are heard in policy committees for the first time.  

One such bill that CMTA has been watching is AB 338 (Joe Coto, D-San Jose) which was amended last week to increase the cap on temporary disability benefits from 104 to 156 weeks.  It will also make changes to the utilization review.   This bill is in stark contrast to AB 1341 (John Benoit, R-Palm Desert) which also attempts to change temporary disability but resolves some unintended consequences of previous reforms in a balanced and fair manner.  

Both bills are scheduled to be heard in the Assembly Insurance Committee on Wednesday, April 11.  While one bill attempts to provide a fair alternative to the concerns raised about the employee’s ability to access his or her benefits during a longer period of time, the other bill takes steps to weaken the safeguards put in place to protect the employer from fraud and increases cost to the employer.  AB 338 imposes an additional cost on the employer because it extends the amount of time an employee can be on temporary disability and it diminishes the incentive for that employee to return to work.  In addition, this legislation will weaken the utilization review, which provides the employer with a tool to dispute potentially inappropriate medical treatment. AB 338 also subjects employers to new penalties and increases confusion and litigation in the workers’ compensation system.

On the other hand AB 1341 promotes return-to-work in an equitable way by allowing 104 weeks of aggregate benefits within four years of the date of injury, or three years from the first day of payable temporary disability, which ever is greater. This gives injured workers adequate time to obtain needed treatment, including surgery, and return to work after recovery. AB 1341 also resolves a situation where an injured worker can earn more while on temporary disability that they did while working.  Under current law, an injured worker who earns $50 per week would qualify for the state minimum temporary disability rate of $126 while disabled.  This difference provides an incentive to some low-wage, part-time workers to stay in the workers’ compensation system.

CMTA has committed to working with stakeholders to resolve unintended consequences of the worker’s compensation reforms and therefore supports AB 1341.  Nevertheless, AB 338 goes too far and actually attempts to reverse the progress we have made based on limited data.  If AB 338 passes out of committee while AB 1341 is held, it will be the first step by the Legislature to weaken the workers’ comp. reforms of SB 899 (Chapter 34, Statutes of 2004, Charles Poochigian, R-Fresno). 
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