CA work comp costs soaring

CA work comp costs soaring

Arnold is numero unoAmid almost complete failure, the one signature achievement of Arnold Schwarzenegger’s seven years as governor was reform of the expensive workers compensation system. Now that’s gone.

His other promises — to refuse to increase taxes and to “blow up the 麻将游戏 boxes” of massive government waste — were repudiated with record his record $13 billion tax increase to pay for record spending increases. He left office in 2011 with $20 billion deficits plaguing the state, as well as numerous personal and political scandals and the destruction of the Republican party the “post-partisan” governor ostensibly belonged to.

His 2004 work comp reform actually did work at first. According to a report at the time:

At a Boeing Co. aircraft factory on April 19, California Governor Arnold Schwarzenegger (R) signed SB 899, a bill reforming California’s workers’ compensation system. The measure had passed the state assembly 77-3 and the senate 33-3.

“This bill completes a process that brought together Republicans and Democrats, business and labor, and all the affected parties to produce billions of dollars in savings, protect workers, and root out fraud and waste in the system,” Schwarzenegger said in a news release issued the day he signed the bill. “No longer will workers’ compensation be the poison of our economy. Our message to the rest of the country and the world is that California is open for business. We are making our state once again a powerful, job-creating machine.”

Schwarzenegger said the measure “would cut down on fraud and waste, and would also aim to get injured workers back on the job without having to fall back on the legal system.”

“We cannot continue to force our businesses, non-profits, and government agencies to be pummeled by costs 2-1/2 times the national average,” said Sen. Chuck Poochigian (R-Fresno), the bill’s sponsor. “This [legislation] gives California businesses and their workers a fighting chance.”

10 years after

10 years after, it all was for naught. The San Gabriel Tribune reported:

California has been ranked as the most expensive state for workers’ compensation costs, according to a newly released report.

The Workers’ Compensation Premium Rate Ranking Summary from Oregon’s Department of Consumer and Business Services shows that California businesses spend $3.48 for every $100 of payroll issued.

That’s 188 percent of the median cost of $1.85 for all 50 states. California was the third most expensive state in 2012 and the fifth most expensive in 2010.

“California’s workers’ compensation system is incredibly inefficient,” said Jerry Azevedo, a spokesman for the California-based Workers’ Compensation Action Network, which seeks to reduce costs for employers and improve services to injured workers. “It does not do a good job of achieving its goal. For as much as employers pay, they don’t get a lot out of it.”

That also applies to injured workers, according to Azevedo.

“You would think that since California has the highest cost system that we’d also have the most generous benefits — but we don’t,” he said. “We plow a lot of money into the system but too little of it ends up in the hands of injured workers.”

Typical of things in California nowadays, the people “helped” didn’t get any help, while the bureaucracy and the lawyers made out like bandits.

The best year for the Schwarzenegger 2004 reforms was 2008, when California ranked 13th best for work comp costs. But now, according to Azevedo:

Since 2009, premium costs in California have climbed by 41 percent due, in part, to an increasing rate of work-injury claims at a time when the rate of claims in most states has been declining,” he said. “California’s system is experiencing more claims for cumulative trauma and those filed post-employment — particularly in the Los Angeles region. Average costs per claim have increased by $30,000 since 2005.

In California, businesses just can win.


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  1. LetitCollapse
    LetitCollapse 19 November, 2014, 12:09

    No wonder the underground economy is growing by leaps and bounds. How could an honest businessman or contractor survive playing by the rules anymore when straddled by these massive costs and fees, when competing against scofflaws who hire illegals and do all their business off the books – thereby avoiding worker comp claims alltogether? Workers comp is government trickle down for the lawyers and the doctors. More ‘pay to play’. The honest guy who starts a wiget manufacturing business hasn’t got a snowball’s chance in hell of making it. He has to support all the parasites that cling to his premiums and fees for their survival. heh. Just a continuation of the bad guys being rewarded and the good guys being punished. Exactly how long can you operate a state or a nation like that before it all comes crashing down? Once people see everyone else breaking the rules it will only incentive them to do the same. Monkey see. Monkey do. TIMBER!!!! 😉

    Reply this comment
  2. Ulysses Uhaul
    Ulysses Uhaul 19 November, 2014, 13:25

    Poor wages, no career paths, no mentors, very high housing and energy costs make for a climate to scam WC. Survival by any means. Why work collect?

    As for the small honest Abe employer….extinction.

    Amenesty will about do it-

    Reply this comment
  3. Ulysses Uhaul
    Ulysses Uhaul 19 November, 2014, 17:29

    Don’t be inflamatory….we get it you’re hurting man…’re giving CWD a bad name. Can’t you lighten up?

    Reply this comment
    • LetitCollapse
      LetitCollapse 19 November, 2014, 20:55

      Being invaded by a foreign nation then having your own leaders side with the enemy just can’t be taken lightly. I am a former soldier. Sorry. It’s ingrained into me to protect my homeland. [parts deleted]

      Reply this comment
  4. Suqs2bu
    Suqs2bu 19 November, 2014, 18:45

    California businesses spend $3.48 for every $100 of payroll issued.

    $13 dollars per $100 payroll is what STATE FUND is charging me. This ‘average’ doesn’t really represent the real world.

    Reply this comment
  5. Ulysses Uhaul
    Ulysses Uhaul 19 November, 2014, 19:31

    Clerical rates are low lowering the overall average. Tree trimmers, framers, roofers pay exhorbitant rates.

    Reply this comment
  6. TruthandtheAmericanWay
    TruthandtheAmericanWay 20 November, 2014, 11:10

    Having spent 30 years as a senior human resource manager, the one issue haunting us was the seriously flawed WC system beginning with State Fund (which was never used by the companies I worked for, thank God) being a massive monetarist bureaucratic albatross of wasted space. Once again, the route cause is government cannot fix what government broke because their cure is always worse than any fix regardless of how well they structure it. The Workers’ Compensation Appeals Board is just a bad. As long as selfish attorneys / medical types control the system, the employer and employee are screwed blue and tattooed into a morass where daylight will never be seen.

    Solution – California needs be deleted and rebooted in so many areas it defies comprehension.

    Reply this comment

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