1. Workers Compensation in California Gabe Brown Bryan Snitselaar Eric Tennison Felipe Trevino Marjan Elahi

2. History California Workers Compensation law was passed in 1913 to shield employers from liability and provide employees with benefits for workplace injuires. California Workers Compensation law was passed in 1913 to shield employers from liability and provide employees with benefits for workplace injuires. Once passed workers compensation was mandatory for all employers in the state. Once passed workers compensation was mandatory for all employers in the state. Guarantees 3 types of benefits: Medical care for the injury, Indemnity cash payments for lost wages & rehabilitation services to enable claimants to return to work. Guarantees 3 types of benefits: Medical care for the injury, Indemnity cash payments for lost wages & rehabilitation services to enable claimants to return to work.

3. Workers’ Compensation Movie DWC Movie **Put a link here if possible** DWC Movie **Put a link here if possible**

4. California Plan Specifics Benefits Benefits Medical Care Medical Care First Aid Treatment First Aid Treatment Temporary Disability Temporary Disability Permanent Disability Permanent Disability Vocational Rehabilitation Vocational Rehabilitation Death Benefits Death Benefits

5. Laws California employers must provide Workers Compensation benefits to employees under the California Labor Code Section 3700. California employers must provide Workers Compensation benefits to employees under the California Labor Code Section 3700. Executive officers and directors of companies must be covered in the policy unless they fully own the corporation. Executive officers and directors of companies must be covered in the policy unless they fully own the corporation. Fine for not having Workers Compensation is $1000 per employee. Fine for not having Workers Compensation is $1000 per employee.

6. Regulation Purchase Insurance through insurance company or the STATE FUND Purchase Insurance through insurance company or the STATE FUND They can also self insure They can also self insure

7. California Workers Compensation Market Share by Type of Insurer Note: “California Insurers” are defined as private insurers who write at least 80% of their workers’ compensation business in California. Source: Workers Compensation Insurance Rating Bureau of California (WCIRB)

8. Bills SB 228 & AB 227 Medical Treatment Medical Treatment 1. Chiropractic & Physical Therapy Visits 2. Using Generic drugs 3. Late payment penalty increase Pricing Issues Pricing Issues 1. Calls for development of online rating of 50 largest insurers. Fraud Penalties Fraud Penalties 1. Increase to $150,000 or twice the amount of fraud.

9. Workers Compensation Reform & Accountability 1. Fight Fraud & Abuse 2. Qualified doctors in charge of treatment 3. Base treatment decisions on facts and evidence. 4. Guarantee fair compensation for real injuries. 5. Balance the rights of injured workers with the interests of their employers.

10. California Workers Compensation Average Rate Per $100 of Payroll 1989-2003 Source: Workers’ Compensation Insurance Rating Bureau of California (WCIRB)

11. State Comparison

12. Fraud Abuse: is defined as using the system for something other than it was intended. Abuse: is defined as using the system for something other than it was intended. Fraud: Occurs when there is clear intent to misrepresent injuries or fabricate injuries. Fraud: Occurs when there is clear intent to misrepresent injuries or fabricate injuries.

13. Workers Compensation Fraud in California Different types of fraud in California Different types of fraud in California Employee fraud Employee fraud Employer fraud Employer fraud Medical fraud. Medical fraud.

14. Employee Fraud Include claims fraud by workers who report accidents that never happened, exaggerate the severity of their injury or try to collect for a non-work related event or file a claim just prior to a plant closing or seasonal layoff. Include claims fraud by workers who report accidents that never happened, exaggerate the severity of their injury or try to collect for a non-work related event or file a claim just prior to a plant closing or seasonal layoff.

15. Employer Fraud Premiums fraud, is perpetrated by employers that try to reduce costs by underreporting payroll, placing employees in improper job classifications, providing an improper business address or misrepresenting the company’s loss history. Premiums fraud, is perpetrated by employers that try to reduce costs by underreporting payroll, placing employees in improper job classifications, providing an improper business address or misrepresenting the company’s loss history.

16. Medical Fraud Medical providers can also commit fraud by submitting claims that reflect an “upcoding” of the injury to support higher fees, switching to products that are not indicated or billing for services that were never rendered. Medical providers can also commit fraud by submitting claims that reflect an “upcoding” of the injury to support higher fees, switching to products that are not indicated or billing for services that were never rendered.

17. Proposed Solutions Employers improve safety training. Employers improve safety training. Two bills AB 227 & SB 228. Two bills AB 227 & SB 228. Put a CAP on Litigation. Put a CAP on Litigation. Governor Arnold’s Reform, November ballot. Governor Arnold’s Reform, November ballot.

18. Effects of the solutions Establishing a risk management program. Establishing a risk management program. Reduction of 11.3 billion overall with SB227 and AB228 Reduction of 11.3 billion overall with SB227 and AB228 A cap on litigation would ensure lower costs and ultimately benefit the system. A cap on litigation would ensure lower costs and ultimately benefit the system. Alternative Dispute Resolution. Alternative Dispute Resolution.

19. Recommendations for California Senate Bill 227 and Assembly Bill 228 Senate Bill 227 and Assembly Bill 228 Training employees/ risk management program Training employees/ risk management program Cap on Litigation with utilization of ADR Cap on Litigation with utilization of ADR Large Deductible Large Deductible

20. Employee Benefit Wheel Internal Internal 1. Total Compensation Strategies 2. Wants vs. Needs 3. Cost Issues 4. HR Management Philosophy 5. Business Objectives

21. Employee Benefits Wheel External External 1. Competition 2. Inflation 3. Legal Requirements 4. Taxation 5. Benefit Innovation

22. Company Web Sites http://www.cna.com http://www.cna.com http://www.cna.com http://firemansfund.com http://firemansfund.com http://firemansfund.com http://thehartford.com http://thehartford.com http://thehartford.com http://scif.com http://scif.com http://scif.com http://travelers.com http://travelers.com http://travelers.com http://icwgroup.com http://icwgroup.com http://icwgroup.com

23. Work Comp Web Sites www.reformworkerscomp.com www.reformworkerscomp.com www.reformworkerscomp.com www.wcirbonline.org www.wcirbonline.org www.wcirbonline.org www.departmentofinsurance.ca.gov www.departmentofinsurance.ca.gov www.departmentofinsurance.ca.gov

24. Any Questions?