http://workerscompzone.com/index.php Copyright 2008, julius@workerscompzone.com julius@workerscompzone.com en-US SPHPBLOG 0.4.8 http://workerscompzone.com/index.php?entry=entry080818-224827
The Governor, that is.

The Governor found time to go have a quick knee arthroscopy while the legislature was in full food fight mode over the budget over the budget.
Since the torn ligament was non-industrial, there was no need to wade through ACOEM review under UR.

Turns out the Governor has had quite a bit of surgery. 1997 heart surgery. 2003 rotator cuff surgery. 2006 femur surgery.

If he has a work injury while in office, looks like there may be grounds for apportionment.

One would hope this gives him perspective on the travails of injured workers. Of course, if the Governor wants surgery it's a just do it mentality. Workers, on the other hand, sometimes must run a gauntlet before getting the requisite approvals.

Stay tuned.

This week I'll be providing analysis on the recent rate increase recommendation filed by the California WCIRB. The proposal-known as a rate filing-was unveiled last Friday.

Julius Young
www.boxerlaw.com
(you can subscribe to the blog by clicking on the lower right hand column RSS reader button found under "most recent entries")]]> Political developments http://workerscompzone.com/index.php?entry=entry080818-224827 julius@workerscompzone.com Tue, 19 Aug 2008 05:48:27 GMT http://workerscompzone.com/index.php?entry=entry080813-140831 (a recommendation with the Department of Insurance) will be coming in the next few days.

The Insurance Commissioner can accept or reject the WCIRB
recommendation. The WCIRB recommendation applies to "pure
premium rates"; these essentially set the tone for California workers' comp pricing but are not binding on California comp insurers.

California employers won't be welcoming this news.

The WCIRB recommendation apparently reflects concerns about rising costs, particularly medical treatment costs.
A WCIRB news release claims that the increase breaks down as follows:
10.8% for increasing medical treatment costs
2.8% for increasing loss adjustment expenses
1.8% "due to the annual adjustment to the experience
rating of balance correction factor"

The small PD rating schedule revision currently under consideration would add another 3.7%.

The WCIRB release notes that even with the increase, premiums would be down 60% from the pre-2004 reform level.

Even without seeing the actual filing, its clear that medical costs continue to be THE big driver in workers' comp costs. Despite somewhat Draconian treatment guidelines and utilization review, medical and pharmacy costs continue to spiral. New medical technologies and more expensive medications may be a component of the problem. It's a scenario not unlike that seen in the healthcare system in general.

Insurers have been feasting on large profits in California workers' comp since 2004. Loss ratios have been at historically low levels for most of the last 4 years. But most observers have expected margins to tighten somewhat tighten somewhat.

The scenario that may be emerging is one where benefit levels for disabled workers are low but costs for employers are rising. If that's the scenario, they system is not "fixed", but rather in need of another overhaul.

Stay tuned.

Julius Young
www.boxerlaw.com



]]> Political developments http://workerscompzone.com/index.php?entry=entry080813-140831 julius@workerscompzone.com Wed, 13 Aug 2008 21:08:31 GMT http://workerscompzone.com/index.php?entry=entry080811-224633
Many in the press and public believed that California workers' comp was rife with worker fraud. The vision was fed by the occasional arrest shown on the 10 o'clock news. Or the story that doctor and attorney mills were feeding on each other, treating workers up the yin yang, ordering every expensive test possible. Billboards plastered over some major metropolitan areas didn't help the perception.

But the perception has changed.

Now there's still focus on employee fraud, but increasing concern about employer fraud.

Marc Lifsher's recent piece in the Los Angeles Times is a good summary of recent efforts to focus on employer fraud. Lifsher's piece is viewable here:
http://www.latimes.com/business/la-fi-c ... 3850.story

My earlier blog piece on the issue was "Its the Employer Fraud, Stupid".
That post is viewable here:
http://workerscompzone.com/index.php?en ... 818-110358

Employer comp fraud is costing honest California employers and insurers huge amounts of money.

There's a good chance your local car wash, dry cleaner and your favorite ethnic restaurant aren't covering their employees. It's that bad.

Until the legislature increases penalties for failing to maintain insurance,
enforcement raids seem to be key. But given the how endemic this problem appears to be (along with widespread other labor law violations), the state has a monumental task in educating employers, many of whom are ethnic minorities.

Stay tuned.

Julius Young
www.boxerlaw.com




I]]> Understanding the CA WC system http://workerscompzone.com/index.php?entry=entry080811-224633 julius@workerscompzone.com Tue, 12 Aug 2008 05:46:33 GMT http://workerscompzone.com/index.php?entry=entry080807-211834
I'm sitting here pondering the fate of AB 515, a bill currently under consideration in the California legislature that would regulate worker chemical exposures.

I can hear the guitar riffs now. Strange brew, strange brew, strange brew-

Eric Clapton, Jack Bruce, Ginger Baker. Cream, one of the British pop super groups. Lotsa wailing guitars.

OK. Alright. You caught me. I'm taking artistic license. Perhaps Cream wasn't singing about toxic sludge, carcinogenic emissions, or workplace exposures. For them, it was strange brew-kill what's inside of you.

But it got me thinking about strange toxic brews that thousands of California workers are exposed to at work. Who sets standards for acceptable exposures? Is the seven -member California Occupational Safety and Health Standards Board adopting standards tough enough to protect California workers?

AB 515 would require the Board to set long term exposure limits in addition to standards limiting short term exposures.

As many as 44 chemicals on the Prop 65 list as cancer-causers are not subject to any standards for worker exposure.

The result? The public receives general Prop 65 warnings of the presence of cancer causing substances, but workers dealing with the substances day in and day out have little or no protection from the effects of long term exposure. Many of these workers will find themselves on workers' compensation years later, their health in shambles.

The availability of a Material Data Safety Sheet doesn't protect workers from long term exposures.

I know. One of my favorite clients died recently of a form of brain cancer, a cancer quite likely linked to his years of service at a Bay Area oil refinery. I visited him at the Walnut Creek skilled nursing facility where-barely able to sit straight in a chair-he gave a two hour deposition detailing his exposures to a long list of chemicals for over 20 years. At the end, he slumped over, barely able to speak. About a month later he was gone.

It's a debate which is playing out under slightly different circumstances on the Potomac. For background on the Bush administration's attempt to change the standard for measuring worklife exposures, check out the post I did earlier this week. Bush appointees are clearly intent on pushing through the agenda of oil and chemical industry lobbyists.

Here in California, AB 515 sits in a precarious political balance. A similar bill was withdrawn last year. Forces opposing AB 515 include the California Chamber of Commerce and California Manufacturers and Technology Association, groups behind the SB 899 workers' comp reform. These are groups who have a virtual hotline to the Governor's office.

Assemblywoman Sally Lieber (D-Mountain View) has lined up a labor and environmental coalition behind the bill. But it will be yeoman's work to keep the coalition from fracturing since some labor groups have concerns about the effect on jobs in the industries they serve.
It's common for groups to sign on or sign off of major bills like this depending on how they see their interests being affected.

Environmental groups have a big stake in this bill and are are likely to continue the push each year until this bill gets done.

Seeking a legacy of environmental progress, Schwarzenegger might sign the bill? It's not clear.

Want to see an example of why the bill is needed? Look at the investigative series by Susan Sward in the San Francisco Chronicle.
Sward detailed the effects of cancer causing chemicals on workers at a Mojave Desert chemical plant, Searles Valley Minerals:
http://www.sfgate.com/cgi-bin/article.c ... amp;hw=sus

Strange and ugly brew.

Stay tuned.

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


]]> Political developments http://workerscompzone.com/index.php?entry=entry080807-211834 julius@workerscompzone.com Fri, 08 Aug 2008 04:18:34 GMT http://workerscompzone.com/index.php?entry=entry080805-214949
This hapless POTUS failed to press a war that needed to be won decisively against the Taliban and Qaeda (Afghanistan) and put us in a war that didn't need to be fought (Iraq). Trillions poorer, while we're nation building in Iraq, we're ever closer to the day when we'll see a nuclear bomb in the hands of Islamists in Pakistan or Iran. Don't get me started. The "war" will not be ending soon, though the focus may be shifting.

But enough of the soapbox. Meanwhile, at home, worker rights have been under attack.

The latest example? Bush appointees are rushing to redefine "working life". It's a concept that has immense consequences for worker safety regulation of on the job toxins.

As of last week, the official proposal had not been publicly announced, but the proposal had been obtained by the Washington Post. The revised regulation would allow business additional rounds of challenges to risk assessments involving chemicals and toxins.

What's the beef over "working life"?

Current regulations assume an average 45 year work life (age 20 to age 65). It's that worklife span that is used to measure the health effects of toxic chemicals on workers.

Bush regulators want to dump the 45 year assumption on the theory that most workers nowadays will not stay at one employer for that long.
The proposal would focus on how long workers actually remain on the job. But that's a difficult concept to measure, and the science behind the changes assumptions may be shaky.

The change has been pushed by industry-friendly conservative think-tanks. For example, the Hudson Institute's Diana Furchgott-Roth did a piece on the issue in the New York Sun. To be fair and present a range of viewpoints, here is Furchgott-Roth's justification for the rule change:
http://www.nysun.com/opinion/battlegrou ... nt=6530008

Congressional committees will be looking at the issue closely. Among those concerned are Ted Kennedy and the Bay Area's George Miller (D-Martinez), whose district includes many workers toiling in chemical plants and oil refineries.

Adding to the concern over the proposed rule is the fact that Bush Administration Labor Secretary Elaine Chao was less than forthcoming about the proposed rule. Public notice of regulatory changes were not filed, and the item only surfaced on the Office of Management and Budget's website (OMB), which indicated it was reviewing the proposal.

This lends credence to the charge that Bush will attempt to give big chemical and manufacturing companies a final present as his administration exits stage right.

Stay tuned. I'll continue to cover the issue.

For those who want to become more involved in workplace safety issues, I'd recommend checking out the website of www.worksafe.org

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



]]> Political developments http://workerscompzone.com/index.php?entry=entry080805-214949 julius@workerscompzone.com Wed, 06 Aug 2008 04:49:49 GMT http://workerscompzone.com/index.php?entry=entry080804-084018
Not so.

Today's Wall Street Journal article by Ellen E. Schultz and Theo Francis
(see link at the close of my post) investigates the growing practice of funding executive pay packages out of pension funds. Companies doing this-which include the Bay Area's Intel-can get tax breaks intended for pensions of regular workers and use them for executive pay.

This adds further risk to many of the pension plans, many of which are underfunded. In the case of Consolidated Freightways, this type of pension shift resulted in Consolidated having just 79% of the assets it needed for paying obligations. The Pension Benefit Guaranty Corp
(not the Rock of Gibraltar itself) had to step in.

The Wall Street Journal investigation found that in Intel's case, a majority of the assets in the pension plan are dedicated not to the pension of rank and file workers but rather to the payout of executives who make up only 4% of Intel's workforce.

This blog usually focuses on workers' comp. But it's important to step back sometimes to get the big picture. Workers-including injured workers-are sometimes suffering while the hogs feed at the trough.

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

You can see the Wall Street Journal article here:
http://online.wsj.com/article/SB1217619 ... s_page_one]]> Political developments http://workerscompzone.com/index.php?entry=entry080804-084018 julius@workerscompzone.com Mon, 04 Aug 2008 15:40:18 GMT http://workerscompzone.com/index.php?entry=entry080801-073727
Today's Wall Street Journal reports that Wal-Mart is organizing all its store managers and department heads to warn that an Obama victory would make it easier for workers to unionize.

Thousands have been summoned to mandatory meetings meetings which
advise about the concern that a Democratic victory could lead to more
union membership.

Wal-Mart is bitterly opposed to the proposed Employee Free Choice Act.
If enacted, the Employee Free Choice Act would allow workers to vote for unions by signing a card rather than just in one secret ballot election. The bill passed the House last year but was taken off the Senate floor after a fillibuster and threatened veto by President Bush.

This comes at a time when Labor Department stats show that workers are losing ground to soaring energy and food costs. Workers are paying a higher share of their benefits. To see some of the stats, click here:
http://latimesblogs.latimes.com/money_c ... surge.html

You can find the Wall Street Journal article here:
http://online.wsj.com/public/article_pr ... 03381.html

Stay tuned.

Julius Young
www.boxerlaw.com

]]> Political developments http://workerscompzone.com/index.php?entry=entry080801-073727 julius@workerscompzone.com Fri, 01 Aug 2008 14:37:27 GMT http://workerscompzone.com/index.php?entry=entry080731-085116
President Bush, Henry Paulson and Congress have cooked up their $300 billion housing rescue package. Perhaps this may help you, or your neighbors (if your lender cooperates and if the numbers still make sense for hanging onto a house rather than walking away from it).

Or as a taxpayer, perhaps you are bemused. You, the taxpayer, and your government, now explicitly guarantee Freddie Mac and Fannie Mae and
are responsible for propping up their stock price. Public guarantees for
private risk taking enterprises. The times, they are a'changin....

One commentator, Bert Ely, was quoted as saying "We have two gigiantic hedge funds out there that now are almost wards of the federal government".

It's part of the "too big to fail" philosophy that seems to have taken root in Washington.

It got me thinking about CIGA, the California insurance Guarantee Association. CIGA is funded by surcharges on solvent insurers. CIGA pays the California workers' comp liabilities of insolvent carriers. Although financially stressed a few years ago when several insurers were liquidated , CIGA came through the crisis.

Could a CIGA-like system be designed where mortgages were surcharged to create a national bailout fund to deal with the kind of crisis we're seeing? Perhaps not. I'm no mortgage industry expert.

But taxpayers-and renters-are now on the hook. The potential exposure is absolutely astounding.

It's also a generational issue. Gen Next kids may be holding the bag for the foibles of Baby Boomer and Gex X folks. Go buy a copy of Christopher Buckley's "Boomsday" for your August read on the beach.

The Fannie and Freddie bailouts create a precedent for other bailouts that is disturbing. Big banks may fail. It's not likely, but what if a large insurer should fail? CIGA will cover the California comp liability, but then there's always Uncle Sam.

You and me.

Julius Young
www.boxerlaw.com



]]> Political developments http://workerscompzone.com/index.php?entry=entry080731-085116 julius@workerscompzone.com Thu, 31 Jul 2008 15:51:16 GMT http://workerscompzone.com/index.php?entry=entry080729-213941 Remember what they were?

If Gov. Schwarzenegger has his way with an executive order dropping state worker pay to minimum wage levels during the budget impasse , many Department of Industrial Relations employees will have their "two words".... "f-him"

Let's hope the budget crisis doesn't impact hard working folks at the district offices of the California Workers Compensation Appeals Board, or the consultants who are working on a number of projects for the DWC.

Tonight we're focusing on some other, more lofty words.

Take Tom Geoghegan. Geoghegan, a Chicago labor lawyer and author has his "6 words". The 6 words? "On the basis of union membership".

The idea is to add union membership to Civil Rights laws as a protected category. This would broaden worker protection for union activity at a time when management has gotten the upper hand in federal labor law under the National Labor Relations Board. Union membership has fallen
to very low levels in most California industries. Certain law firms are noted for their union busting talents.

Most kids now growing up in California don't understand unions and the role they've played in the development of this country. I'm not saying that they need to know who Samuel Gompers, Walter Reuther or John L. Lewis were. But few kids now have any exposure to unions.

Yet its unions that have led the push for worker safety and better conditions.

The "6 words" would help level the playing field.

This is the thesis of an op-ed piece by labor and economic justice advocate David Sirota. Check out Sirota's piece (that appeared in the San Francisco Chronicle) by clicking here:
http://www.sfgate.com/cgi-bin/article.c ... =printable

This is a concept that might get traction under a Democratic Governor in California or under an Obama presidency.

The California Labor Federation held its convention in Oakland last week. Some unions have their back to the wall, while others are pressing ahead to organize new swaths of the labor force.

It's been good to see organized labor show more interest in workers' compensation recently. In case you missed it, the California Labor Fed did a study on workers' comp:
http://www.calaborfed.org/PDFS/2007/Leg ... .27.07.pdf

Legislative director Angie Wei spoke at last week's hearings on the PD schedule proposal, urging that it be revamped even more.

Stay tuned.

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






]]> Political developments http://workerscompzone.com/index.php?entry=entry080729-213941 julius@workerscompzone.com Wed, 30 Jul 2008 04:39:41 GMT http://workerscompzone.com/index.php?entry=entry080726-141554
What's the position of the applicant attorneys on the issue? Is CAAA setting forth a proposal of its own?

After all, interest groups are often reluctant to set forth policy proposals for fear that such proposals will set up a negotiating disadvantage. When's the last time you heard a proposal for meaningful immigration reform from either the Federalist Society or FAIR (on the right) or La Raza or ACLU (on the left)? I'm a non-doctrinaire ACLU member, so I can say that. Sometimes it's easier to harp on the most extreme abuses of the system than it is to suggest the hard choices neccesary to create workable reform.

CAAA was basically excluded from the table during negotiations on comp reform in 2005 and from meaningful participation in design of the 2005 PDRS.

But this week CAAA took the leap, setting forth a proposal for revise of the 2005 permanent disability schedule.

Below I've posted a pdf of the CAAA position papers.

If you're not a workers' comp groupie, put on your thinking cap. There's a lot of jargon. RAND report. Concept of diminished future earning capacity. Crosswalk factors. FEC modifiers.

A good place to start is the piece by insurance consultant Mark Gerlach which explains the background of the diminished future earning capacity concept:

Diminished Future Earning Capacity

Here is the July 2008 PDRS revise proposal by CAAA (in pdf format):

Proposed Regulation

For more background on the issue, here's the link to my recent piece in the California Progress Report:
http://www.californiaprogressreport.com ... ork_2.html

Those wanting more background might want to look at the 2006 CHSWC report on PD schedule reform:
http://www.dir.ca.gov/CHSWC/Reports/CHS ... 3-2006.pdf

Ultimately, action on the PD schedule will be political. Now that hearings are done, Ms. Nevans (DWC AD) must take a stand.

The outcome may determine whether Nevans is confirmed or whether she becomes a casualty of the ongoing comp wars in one of the last acts of the Perata period.

More later on details of the CAAA proposal.

Julius Young
www.boxerlaw.com
(you can subscribe to the blog by clicking on the RSS buttons on the right column under "most recent entries")]]> Political developments http://workerscompzone.com/index.php?entry=entry080726-141554 julius@workerscompzone.com Sat, 26 Jul 2008 21:15:54 GMT