CCWC Legislative and Political Update

The 2015 California Coalition on Workers’ Compensation Annual Conference (CCWC) kicked off with a Legislative and Political Update presented by Paul Yoder and Jason Schmelzer from CCWC.

In the last year, there have been four out of 40 members of the State Senate who were suspended for misconduct. This resulted in the Democrats losing their super majority in the Senate.

Governor Brown is in his fourth and final term as Governor. Although he does not plan on running for any additional political offices, he has almost $20 million in campaign funds in the bank. He retains a 52% approval rating in the state.

With regard to upcoming elections, current State Attorney General Kamala Harris is running essentially unopposed for a U.S. Senate seat. If she wins, Governor Brown will need to appoint a replacement mid-term to her post. The Democrats hope to take back the Senate seats they lost in 2014 during the next election so they can regain their super majority. They are currently two votes short of achieving this in the Assembly and one vote shy in the Senate. There are a number of tax issues pending in the Legislature that requre a 2/3 vote to pass, and the super majority would allow the Democrats to pass this bill without any Republican support.

Currently there are 44 active ballot initiatives in California. Among them are:

• A referendum to legalize the recreational use of marijuana in California. There are rumblings that the Governor opposes legalization of marijuana and he may put some of that $20 million war chest toward opposing this. 54% of voters favor legalization. While many assume a marijuana bill passing is a certainty, the polling numbers do not indicate this.
• Vaccine Bill Referendum to overturn the recent law the Governor signed mandating vaccinations. 67% of voters polled believe they should be required.
• Cigarette tax increases.
• Prop. 30 Tax Extension, which 49% of voters favor. This is over $7 billion in annual revenue for the state. The Governor is not supporting this extension.
• Plastic Bag Ban Referendum to overturn the ban on plastic grocery bags passed last year.
• Blackfish Initiative, which would ban businesses in California from keeping killer whales in captivity.

In a recent poll, California voters were asked what they viewed as the most important issues:

• Water and drought – 39%
• Jobs and the economy – 20%
• Crime, gangs and drugs – 5%
• Pollution and global warming – 5%
• Immigration – 5%

Recent polls also indicate a very unfavorable view of state government, with 62% of voters feeling that “a few big interests” are running things, and that 61% of voters feel the government can only be trusted some of the time.

On the workers’ compensation side, expenses still make up a significant majority of total costs and this figure has been growing. One of the goals of SB 863 was to reduce system expenses and increase efficiency, and this has not been effective.  According to the Oregon study, California currently is the most expensive workers’ compensation system in the country and their costs are 188% of the national median.

The 2015 legislative priorities for CCWC include:

• Cumulative Trauma – CT claims seem to be driving the spike in frequency in California and much of this is coming from post-termination claims. California stands out among other states in the frequency of CT claims.
• Presumptions – The Governor has vetoed several bills which would extend presumption laws to cover several new classes of employees, including some private sector employees.

Key workers’ compensation bills include:

• AB 305 – Removes alleged “gender bias” from workers’ compensation. In particular, this would make sure the amount of PD payable for prostate cancer and breast cancer would be comparable. Also, it would ban apportionment for pregnancy, menopause, osteoporosis and psych related to sexual harassment. This bill would essentially change the game when it comes to apportionment because it will allow conditions that are clearly not work related to be compensable. It also ignores the AMA guides for determining PD. This bill is expected to reach the Governor’s desk.
• AB 438 – Requires DWC / DIR to publish all materials in multiple languages. Current law only requires notices in English and Spanish. This bill is still pending.
• AB 511 – Expansion of presumption laws. This bill was held in committee and it is dead for this term.
• AB 1124 – Development of a Pharmacy Formulary for workers’ compensation. This bill is still pending.
• SB 488 – Required individual licensing of claims adjusters working for a TPA. This died in committee.
• SB 563 – Precluded UR on claims that were open for future medical only at the time SB 863 passed. This died in committee.