2019 California Legislative Update

At the 2019 Executives in Workers’ Compensation conference, Jeff Rush from California JPIA discussed pending legislation impacting workers’ compensation and liability claims in California. 

California has single party rule, with a Democratic governor and Democrats having a super-majority in both houses of the California legislature. This single party system makes it very easy for the party in power to pass legislation. With the super-majority they can pass tax measures by a wide enough margin as to not trigger voter approval requirements for such measures. 

The biggest question around California legislation this year is what will Governor Newsom do? There are some fairly extreme bills out there that the prior Governor Brown vetoed numerous times.

New California Insurance Commissioner Ricardo Lara is a huge advocate of universal healthcare and he is actively pushing this for the state. There really have not been any discussions around how workers’ compensation would fit into a single payer healthcare system in California. 

There are over 1000 pieces of legislation that have been introduced this term. This number is higher than ever before because there was a law passed last year that increased the number of bills an individual legislator can introduce. 

The Appropriations Committee is where a lot of bad legislation is stopped because part of their job is to review the impact legislation will have on the State. If legislation will significantly increase the costs of the state, that Committee is supposed to weed it out

Multiple bills were discussed. It’s important to note this is a fluid situation to the status of these bills and their language is constantly changing. Some of bills highlighted:

AB 218
This bill would extend the statute of limitations for childhood sexual abuse claims from 5 years after turning 18 years of age, to 40 years of age or 5 years after the plaintiff discovers the abuse whichever is later. It also creates treble damages in some cases. The bill would also allow for reopening of any case that did not receive a ruling from a judge. This includes cases where the plaintiff was represented by counsel. 

AB 5
This bill asserts that the Dynamex Supreme Court decision last year was a “declaration of existing law” for wage/hour claims. This would codify the ABC test for independent contractors. This bill is limited to wage/hour claims not workers’ compensation. 

AB 71
Asserts that the Borello and not the Dynamex decision defines employee vs independent contractor relationship. The Borello decision focuses on the hiring party controlling the work, providing tools to perform the work, and the parties believing they are creating a employment relationship. 

AB 1107 
This bill precludes the use of utilization review for 
A serious chronic condition, cases where the employer previously authorized care, and cases where treatment is provided by a MPN physician.
This bill would essentially eliminate utilization review for workers’ compensation in most circumstances and it would likely eliminate the IMR process. 
This bill was recently amended to include a provision for injured workers to pursue penalties for delays in treatment caused by the utilization review process

SB 731
Bill introduced following the City of Jackson vs WCAB (Rice) decision which allowed apportionment to genetic factors. This bill would preclude apportionment based on race, religion, national origin, age, gender, sex, sexual identity, sexual orientation or generic characteristics. It would eliminate a significant amount of apportionment allowed today.

AB 981
Consumer privacy is a huge issue in the California legislature this year. This bill would exempt insurers from provisions of the California Consumer Privacy Act (CCPA). The way the law is currently written, insurers and third party administrators could be subject to fines related to gathering medical information in the handling of a claim. 

AB 651
This would set air ambulance reimbursement rates as rates set by Medi-Cal. These types of bills have been defeated many times in Federal courts as they ruled the Federal government alone has the power to regulate that industry. 

AB 749
This bill would preclude the resolution of employment disputes from including provisions that requiring resigning from employment. This bill is awaiting a vote on the House floor. 

AB 346
This would make police officers of school districts, county officers of education and community colleges eligible for Labor Code 4850 benefits. These benefits currently allow police officers and firefighters to receive their full wages (untaxed) as compensation during the first year of disability. Under the 4850 benefits, workers receive higher pay off work than they would if at work. 

AB 1116/1117
These bills would create peer support teams for first responders. There is no mention on how this would be funded. The bill would prohibit the disclosure of communication between the first responder and the peer supporter.

AB 932 
This would grant worker’s compensation coverage to fire fighters who engage in fire suppression or rescue efforts outside the state. This bill is in response to a similar bill past last year that provided these benefits to police officers. The bill would apply retroactively to October 01, 2017 the date of the Las Vegas shooting. 

AB 1400
This bill expands the firefighter cancer presumption from active firefighting members to fire service personnel with exposures to active fires or health hazards resulting from firefighting operations. The vague terms of these bills would invite litigation and it would undoubtedly lead to legislation next year involving public safety personnel in similar roles.

SB 542
This bill would create a PTSD presumption for firefighters and peace officers. The bill would also allow for the reopening of denied claims for date of accidents 01/01/17 to present. This bill is currently on the Appropriations Committee suspense list, which means it may not move forward. 

SB 416
This would expand heart, hernia and phenomena presumptions to firefighters and peace officers.

SB 567
This bill would create presumptions into the private sector for the first time and covers healthcare workers. It would provide a presumption of injury for:
Blood borne illnesses
TB
Meningitis
Cancer
Back injuries
PTSD
Orthopedic injuries

One thing to keep in mind is that California has a “gut and amend” rule that allows introduced bills to be completely changed. So what we see now as pending legislation is not necessarily what we will end up with in the future. 

It’s too early to know which of these bills will ultimately pass and what the Governor would do if these bills reached his desk. However, all these bills would increase the costs for employers and taxpayers in California.