Friday, October 31, 2008, 10:11 PM - Understanding the CA WC systemKing Kong. Jack the Ripper. Atilla the Hun. The Mummy.
Those were not AIG and The Hartford stockholders, looking for extra morsels of food. No, it was just some kids, dressed as pretty scary ghouls at my door tonight, in quest of a candy fix.
Next year perhaps we'll see some different masks. Alan Greenspan would be a natural. And perhaps there will be a Henry Paulson mask. Franklin Raines, Richard Fuld, or Joseph Cassano? Too arcane. But perhaps masks will emerge for other "Masters of the Universe" who led us into the swamp of de-leveraging and to the precipice of deflation.
But tonight, dear comp community reader, before you reread that copy of Bonfire of the Vanities, let's turn our attention to a nugget of good news amidst all the doom and gloom.
There was some good news in the California workers' comp world.
Temporary total disability maximum rates will rise next year, due to the SAWW (state average weekly wage) increase. For injuries in 2009, TTD maximums will rise to $958.01 as of 1/1/09. TTD minimums will rise to $143.70. Workers eligible for TTD can draw 2/3 of their average weekly wage, subject to the maximums and minimums.
Workers who are still temporarily disabled more than 2 years after the date of injury (but who have not reached 104 weeks of TTD) may qualify for the increased rates. That's called the Hofmeister bump.
The increase in the SAWW will also affect workers injured after 2003 who are eligible for life pension or permanent total disability benefits
(due to the operation of the COLA under Labor Code 4659(c)).
Disclosure:an upcoming issue of the State Bar Workers Comp Section
magazine, the Workers Compensation Quarterly, will feature an article on SAWW increases and COLAS written by yours truly along with Richard Jacobsmeyer of oakland and Jeff Greenberg of San Francisco.
The way the economy is going, SAWW increases for 2010 may be small or nonexistent. But it's good to see that some workers on TD will be able to keep up with inflation based on the 2008 wage figures.
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Wednesday, October 29, 2008, 10:10 PM - Political developmentsIt's good to have a sugar daddy. Someone to pay the bills.
Sarah Palin had the Republican National Commmitee, treating her to shopping binges at Barney's and Nieman Marcus.
CNA insurance, hemorraging millions in the 2008 economic crisis, turned to its corporate parent, Loews Corp., controlled by the Tisch family. CNA has been a major player in the California workers' comp market over the years.
Hoping to head off at the pass any credit ratings issues, Loews gave CNA an infusion of $1.25 billion.
That's some sugar.
Still nesting at the U.S. taxpayer's teat is AIG. The U.S taxpayer is is committed to the tune of over $123 billion. $90 billion of that has already been drawn down.
Put this in perspective. This sum-for AIG, one company-is way more than currently guaranteed to the failing U.S. auto industry.
This sum-for AIG, one company-is about one-sixth of the total rescue package for the banking industry.
It appears that AIG is leaking like a sieve. Treasury officials and Congressional investigators are now trying to determine how AIG has lost so much of its cash so quickly.
Analyst are sifting through AIG documents to determine to what extent AIG executives issued misleading statements about the company's condition.
Talk about lack of transparency. What went on at Lehman Brothers may have been child's play compared to AIG.
There is concern that AIG may soon require a lot more money. But how much more money is Treasury prepared to extend to save the Titanic?
Here's a link to an article by Mary Williams Walsh that just appeared tonight in the New York Times, with many details about the unraveling of AIG:
http://www.nytimes.com/2008/10/30/busin ... nted=print
We're all going to pay for this.
I'll be posting soon about Insurance Commissioner Poizner's 5% solution: his rejection of the WCIRB rate increase recommendation.
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Monday, October 27, 2008, 10:56 PM - Vocational retrainingAt the bottom of this post there is a link to a DWC newsline issued today.
The DWC advises that the right to vocational rehabilitation sunsets at the end of 2008 for those workers injured before 2004 who might otherwise be eligible.
A benefit that had no dollar limits before 1994 and a $16,000 cap after 1994 may be expiring forever.
There is some controversy over this. I've heard some applicant attorneys advance the argument that voc rehab may still be pursued after January 1, particularly if rehab was started (or demanded) before January 1.
We are coming up on Halloween, so it's a fitting time to note that some attorneys believe that the courts could enforce voc rehab by recognizing
"ghost statutes" even though the Voc Rehab "bureau" or "unit" as it has been called will no longer exist.
Perhaps. But that's an untested and risky strategy.
So those workers seeking VR now have a window of time to use it or lose it. Workers injured after 1/1/04 will remain eligible for a job retraining voucher.
The DWC newsline can be seen here:
http://www.dir.ca.gov/dwc/dwc_newslines ... 62-08.html
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Friday, October 24, 2008, 10:54 PM - Political developmentsIt's been an eventful Fall.
First, investment bank failures and the bailut of AIG, with the U.S taking a large stake. Then focus turned to big banks that were teetering, and the credit freeze.
Today it appears hedge fund failures may be the next big wave (see the Schwab link below for a good discussion)
And following that, precarious economic situations in many developing countries could put total economies at risk. Remember what happened in Argentina and Thailand?
But not much attention has been paid to insurers other than AIG. A post I did several weeks ago did mention possible problems at The Hartford.
Today we learned that Treasury Secretary Paulson is considering buying stakes in huge U.S. insurers. This could include some who write California workers comp (Travelers) and others that don't, such as Allstate, MetLife, and Prudential. AIG is said to need more capital and therefore, more bailout assistance.
Investments at many of these insurers are under pressure, and stock prices have tumbled.
With the markets in free fall, it's quite possible that we could see the multiline parent companies of some workers' comp insurers going into deeply distressed territory.
Check out these links:
On the Paulson story:
http://www.bloomberg.com/apps/news?pid= ... oQ3PwAR46o
On the hedge fund situation:
On the unwinding of the economy:
http://www.schwab.com/public/schwab/res ... =P-2655315
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Tuesday, October 21, 2008, 08:33 PM - Political developmentsLater, alligator.
That's the message Acting Administrative Director Carrie Nevans delivered to future injured workers in her talk to a Sacramento workers' compensation conference yesterday.
Earlier this year the DWC had floated a proposal for a revision of the 2005 Permanent Disability Rating Schedule. That proposal-designed for implementation in January 2009- would have restored a small amount of the cuts from permanent disability benefits endured by disabled workers since 2005. Several studies, including ones by several University of California faculty, have shown that injured workers may be receiving less than 50% of the benefits for permanent disabilities that they received before reform.
Somewhere in California there are currently workers pounding nails, erecting steel on skyscrapers, and paving roads on projects that will continue into 2009. Some of those workers will be injured after 1/1/09.
Those workers just got the shaft.
Nevans is now saying those workers injured in early 2009 will get no PD benefit increase.
As quoted in a piece by Jim McCaffrey on workcompcentral.com, Nevans announced that any benefit increase will not go into effect until July 2008. Even that is not guaranteed.
So now the DWC is not merely proposing an insubstantial PD benefits increase. The DWC is stalling on that increase. CHWSC, the bipartisan California Commission of Safety, Health and Workers' Compensation has recommended upward adjustment of the PD schedule for several years now.
The legislature has spoken three years in a row, passing a bill that would dictate an increase only to see that vetoed 3 times.
It's not clear at the moment whether the PD schedule revise is political payback for Nevan's failed confirmation. Outgoing California Senate Pro-Tem Don Perata refused top bring the Nevans confirmation to a floor vote at the end of the legislative settlement as the budget impasse was resolved. I am not aware of any credible evidence that Nevans' nomination was killed at the request of CAAA.
Nevans-who I don't personally know-is said to be a decent person who cares about injured workers. Some argue that her leadership has resulted in some incremental regulatory changes beneficial to workers.
Others feel that she has been a steady hand at the DWC in a time of challenge and change.
Nevans is undoubtedly not calling the shots. But Nevans has been the face of the administration's stall. And so some workers and labor advocates, unaware of any evidence of Nevans' advocacy for workers within the political labyrinth of the Schwarzenegger administration, see Nevans as the fox guarding the henhouse.
One problem in the system is that the DWC rarely has to answer to the legislature and the press.
When the legislature reconvenes, it's time for new Senate Pro-Tem Darrell Steinberg to hold hearings and demand answers from Nevans and legislative policy aide Susan Gard.
Note these prior pieces I did on the PD schedule issue:
"The PD Schedule Hearings:What's At Stake?"
http://workerscompzone.com/index.php?en ... 720-212428
"The CAAA PD Schedule Proposal"
http://workerscompzone.com/index.php?en ... 726-141554
"Insurer Pofits Greater Than Benefits Paid To Injured Workers"
http://workerscompzone.com/index.php?m= ... 518-115548
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