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Perata Touts Workers' Comp Bill

Senate leader urges Gov. Schwarzenegger to sign a stopgap measure restoring benefits possibly cut in error in 2004 overhaul package.

September 02, 2006|Marc Lifsher | Times Staff Writer

SACRAMENTO — The Senate's top Democrat said Friday that he would beg the governor to sign a bill passed in the last hours of the legislative session that would double benefits to workers injured on the job.

The measure is meant to be a temporary fix to what might have been an inadvertent slashing of permanent disability payments as part of Gov. Arnold Schwarzenegger's landmark 2004 overhaul of California's workers' compensation system.

Although employers and most insurance companies are asking Schwarzenegger to veto the bill, proponents, led by Senate President Pro Tem Don Perata (D-Oakland) have gained an influential ally.

Stanley Zax, president and chairman of Woodland Hills-based Zenith National Insurance Co., the state's biggest, private sector workers' compensation carrier, calls the bill fair and wants the governor to sign it.

Giving seriously injured workers more money shouldn't be much of a burden, considering workers' compensation has chalked up nearly $9 billion in savings in less than three years, Zax said.

Once-soaring premiums paid by California employers have dropped by about half, while insurers, who lost money until a few years ago, are earning their fattest profits in three decades.

"The savings to everybody are far greater than anybody anticipated, and the cost of this legislation is 5% a year maximum," Zax said. "I don't see that as material."

Schwarzenegger, who repeatedly vowed that his workers' compensation overhaul would not harm truly injured workers, has yet to take a position on Perata's bill, spokesman Darrel Ng said.

He said the governor is inclined to wait for a report on permanent disability benefits due in late December.

Employers' advocates said they were wary of Perata's last-minute passage of workers' compensation legislation and urged the governor to take no hasty action.

"The reforms the governor signed have had a dramatic impact upon small-business rates and optimism and job creation. They need time to take effect." said Martyn Hopper, state director of the National Federation of Independent Businesses.

But government studies are often months or years late, and meaningful data about the adequacy of current benefits could be three or four years away, Zax and Perata said.

In the meantime, preliminary research by an independent government think tank, the Commission on Health and Safety and Workers' Compensation, indicate that those benefits have declined by at least 50% after the Schwarzenegger administration came up with new formulas for calculating permanent disability.

The reduction has brought a real hardship to Kyle Van Houten, 23.

The former champion football player from Escalon in the Central Valley lost his leg in a construction accident in July 2004, three months after Schwarzenegger signed his workers' compensation bill.

Under the new law, Van Houten's permanent disability benefit is $29,150, compared with $122,812 he would have received under the old formula.

"I went from being an all-state football player to feeling like less than a whole person," he said at a news conference Friday. "I lost my active youth, and now the governor is taking most of my permanent disability compensation." His employer's insurance company also turned down his request for a prosthetic leg, rehabilitation training and physical therapy, he said.

Perata's bill, SB 815, would gradually raise permanent disability benefits over three years to their level before Schwarzenegger overhauled workers' compensation. However, the proposal would not affect eligibility criteria or any of the new law's other money-saving changes.

Perata, who worked closely in the last session with the Republican governor, said he's hoping to build on his improved relationship by persuading Schwarzenegger to approve his bill.

"I will beg the governor to do this," he said. "He'd be doing it for the workers. He's not going to injure the economy, he's not reneging on a promise. He can still say California is reforming workers' comp.

"We're just not doing it at the expense of workers."

marc.lifsher@latimes.com

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