Running out of money.

No, I'm not talking about Lehman Brothers, the venerable New York
investment bank that is teetering and "restructuring". And I'm not talking about Ford or General Motors, both of which have been burning through cash like there was no tomorrow.

I'm talking about the California unemployment fund.

At current rates, the fund will be almost $2 billion in the red by the end of 2009.

Meanwhile, California's unemployment insurance fund has a big backlog in processing unemployment eligibility appeals.

The situation is deteriorating in these tough economic times.

Add this to the list of problems that need to be addressed by the legislature.

You can see a good analysis by Associated Press journalist Steve Lawrence that appeared in the Sacramento Bee by clicking here:
http://www.sacbee.com/114/v-print/story/1225901.html

This is of more than passing interest for some disabled workers. I've had many clients who were "laid off" after their injures. While the layoff may have been discriminatory under Labor Code Section 132A or under the disability discrimination provisions of California's Fair Employment and Housing Act, 132A claims and FEHA litigation are time consuming.

As a practical matter, many individuals in those circumstances will seek unemployment benefits. Troubles at the fund could represent another instance in which the social safety net becomes shredded.

I'll continue to cover this story as it unfolds.

Julius Young
www.boxerlaw.com
(you can subscribe to the blog by clicking on the RSS reader button on the lower right column under "Most Recent Entries")

It's funny how circular life can be.

Schwarzenegger, whose efforts to recall Gray Davis jumpstarted his political career, may now be facing his own recall.

The California Correctional Peace Officers Association has issued a notice of intent to do just that. Whether this is posturing to get more concessions out of the budget or whether it's for real remains to be seen.

The next step would be a filing with California's Secretary Of State to be followed with a signature drive that would require over a million signatures.

With Schwarzenegger having low approval ratings and records being set every day for the longest time California has been without a budget, the idea could gain some political traction. And with little love being lost between some California Republicans and Schwarzenegger, it's not clear whether he would get strong or only tepid support in fighting a recall.

But the Governor could probably count on a big ally: John McCain.

Presumably Schwarzenegger would be able to raise large amounts from the business community that has benefitted from workers' comp reform and his "anti-job killer" stance on many bills. I suspect he would raise "whatever it takes" to avoid the fate of Gray Davis.

Signature gathering and recalls are expensive, even for a well-funded union like CCPOA. Most unions are focusing their efforts now on getting Obama elected, and it's not clear whether there are other unions or liberal interest groups that might join in taking the lead in a recall.

And with Obama appearing-at least at this moment-to be falling behind as polls show McCain taking an increasing share of likely independent voters, Democrats could be under more pressure than expected this fall.

The budget standoff appears likely to drag on for at least another few weeks, but some sort of resolution may take further wind out of the sails of any recall talk.

Bottom line: the Governor probably is vulnerable, but it's not clear this talk will go far at the moment.

If the recall is initiated, look for a fascinating scramble among the state's pols.

Stay tuned.

Julius Young
www.boxerlaw.com
(you can subscribe to the blog by clicking on the RSS reader button
at the lower right column under "Most recent entries")

Hopes for comprehensive healthcare reform in California in the near term crashed and burned in late 2007. Even a special legislative session failed to produce a comprehensive healthcare package.

But-to its credit-the legislature hasn't given up. Recognizing that millions of Californians have no healthcare coverage (including many disabled workers who are no longer covered by group medical), Democrats in the legislature have sponsored a number of bills to ease access to coverage and prevent abuses by health insurers.

Injured workers have a dog in this hunt.

AB 1945 (DeLaTorre) would prevent insurers from retroactively canceling coverage unless they could show that intentional misrepresentations were made in the application for coverage. Over the past few years there have been occasional horrendous stories of insurers yanking coverage from seriously ill folks. This bill would force insurers to face a high standard of proof before rescinding coverage.

SB 1440 (Kuehl) would require health insurers to spend 85% of premium dollar collected on patient care. That's a fine concept, and one the governor has supported as part of his 2007 healthcare proposal.

Other provisions would expand the list of required items to be covered.
AB 1877 (Beall) would require coverage for diagnosable mental illness.
AB 1962 (DeLaTorre) would require maternity care be covered. AB 1198
(Kuehl) would require durable medical equipment (wheelchairs, etc) be covered.

AB 2 (Dymally) would reform the high risk insurance pool, attempting to make insurance more available for high risk individuals.

You can read about these and other healthcare bills in an excellent article on the California Progress Report by Hanh Kim Quach of Healthcare Access California:
http://www.californiaprogressreport.com ... al_25.html

It's not clear what Governor Schwarzenegger will do with these bills.
Schwarzenegger's governorship will be in its sunset phase before we know it, and with that goes his chance of leaving a legacy. Piecemeal reform was clearly not his first choice, but it may be his only option.
If he fails to sign these bills, he may find that he will achieve absolutely nothing in healthcare reform during his tenure.

Given the state's budgetary distress, it's hard to envision comprehensive healthcare being enacted in next year's 2009 legislative session. One hopes the Goverrnor will think twice before rejecting these "piecemeal reforms".

Stay tuned.

Julius Young
www.boxerlaw.com
(you can subscribe to the blog by clicking on the RSS reader button on the right lower column under "Most recent entries")

It was an interesting weekend. Those of us who hadn't previously followed Alaska politics were introduced to Sarah Palin, who has registered the name "Rouge Cou" (translated as "redneck") for a marketing venture.

Rust belt hockey moms, NASCAR dads and Catholic women may be deciding whose fairy tale comes true.

Turns out Palin is the part owner of an Anchorage car wash. Here in California the car wash industry has been the poster-boy for labor law violations. It'll be interesting to see whether that's the case in Alaska or whether Palin ran a "clean" car wash.

But while you were barbecuein' and the media was reeling at the Palin pick, the California legislature was wrappin'.

We may not have a state budget yet. But we have comp legislation on its way to the Governor's desk.

The bill in increase benefits to permanently disabled workers over a 3 year period-SB 1717- passed its last Assembly hurdle. The vote on August 29 was 46-31, with 3 absent or abstaining. The California Senate voted in favor 23-14 back on May 17. To see how the Assembly voted, click here:
http://www.leginfo.ca.gov/pub/07-08/bil ... floor.html

To see the official analysis of SB 1717, click here:
http://www.leginfo.ca.gov/pub/07-08/bil ... floor.html

SB 1717 is now on its way to the Governor, where it faces almost certain veto. Similar bills were rejected in 2006 and 2007. The third time is not likely to be the charm.

Also on its way to the governor is the Migden bill on apportionment discrimination, SB 1115. Here is the official analysis of SB 1115:
http://www.leginfo.ca.gov/pub/07-08/bil ... floor.html

SB 1115 passed out of the Assembly on 8/19, on a 46-31 vote, with 3 absent or abstaining. Here is the Assembly tally:
http://www.leginfo.ca.gov/pub/07-08/bil ... floor.html
And here is the Senate tally:
http://www.leginfo.ca.gov/pub/07-08/bil ... floor.html

I'll be covering any developments as these bills head toward Schwarzenegger's desk.

Stay tuned.

Julius Young
www.boxerlaw.com
(you can subscribe to the blog by clicking on the RSS reader button on the lower right column under "Most recent entries")

J.P. Morgan. Savior of Bear Stearns. Now coming to workers' comp.

Huh?

There's a reason why the folks on Wall Street are on Wall Street. They understand how to gin up new financial opportunities.

Credit debit swaps and slice n' dice mortgage pools. Been there. Done that.

Where's there a huge pool of cash ready for the tapping?

Workers' comp. That's where.

What if we could get the float on some of worker indemnity payments? We'll handle the funds-cash deposited by the insurer up front-and invest those monies, all the while making the funds available to the disabled worker.

Voila! Workers' comp debit cards. The worker can use them like cash to pay for a wide range of items or withdraw cash like an ATM. A toll free number would allow workers to check balances. Workers without bank accounts would not be forced into expensive check cashing services.

Advantages? Problems with account holds and missing or late checks would be reduced if not eliminated. Transaction costs for employers and carriers might be lowered.

But like all plastic, there are problems. ATM-like access to cash might facilitate irresponsible financial planning by impulsive injured workers.
And how to pay landlords and utilities? Many of these workers are not folks who do electronic banking.

And with the entire banking system under cloudy skies, involving large banks in new financial products may be a bit much for many to stomach.

I've yet to hear discussion of workers' comp debit cards in California.
I'll leave it to wiser oracles to analyze whether comp debit cards would be permitted under current statutes or whether there would need to be enabling legislation.

But stay tuned.

Julius Young
www.boxerlaw.com
(you can subscribe to the blog by clicking on the RSS reader button on the right lower column under "Most Recent Entries")