Aug. 6, 2013 — During the last decade many California businesses have financially benefited from reforms made to the ailing state’s workers’ compensation insurance system. But our Sacramento lawmakers are far from finished with the overhaul needed in this important program created over a century ago tohelp employees with legitimate job-related injuries.
The key word here is “legitimate.”
That message really hit home this month as Feather Publishing began shopping rates for our policy’s August renewal. We were shocked to learn that the Workers’ Compensation Insurance Rating Bureau proposed a flat, across-the-board rate increase for all classifications. The 18 percent hike was approved by the California Department of Insurance.
When you combine that increase with a host of other factors insurance companies take into consideration — risks, exposure, certain classifications, etc. — before offering a quote, the number of insurance companies willing to quote a particular plan can become quite small. And that simply means their rates are usually not very competitive.
For Feather Publishing, the best offer we had was 25 percent more than we paid last year. Our monthly premium will be about $1,000 more per month. For us and other small businesses already struggling to make ends meet, this added cost only compounds the problem.
If workers’ comp dealt with truly legitimate claims, we wouldn’t be staring at such an astronomical increase this year.
Take, for example, the current battle playing out at the State Capitol between lawmakers, trying to fix parts of this broken system, and representatives from professional sports.
Since the early 1980s, California law allows professional athletes to make a claim in California for workers’ compensation if they have played at least one game in the state. To date, an estimated $747 million has been paid out to some 4,500 athletes — usually in lump-sum payments.
As an example: Former Dallas Cowboy and Hall of Fame football star Michael Irvin was awarded $249,000 and he’s just one of the many big name, highly paid athletics taking six-figure cash settlements! Another 4,000 cases are still open and it has been reported that 75 percent of those claims have been made by players who have never played on a California team. We understand this represents an estimated $1.57 billion in potential liability for our state.
But there’s a glimmer of hope, at least with this glaring flaw in the comp system.
Last week the Assembly overwhelming passed Assemble Bill 1309, a measure that restricts the filing of workers’ comp claims by professional athletes. One significant highlight in the bill is that it will apply retroactively, thus wiping out those pending claims that benefits would have to have been paid for under existing law.
We applaud the Assembly and urge our senators to quickly put this on the governor’s desk for his signature.
Maybe the multibillion-dollar professional sports industry can absorb these kinds of increases in their businesses. We know the majority of the rest of us in business can’t.
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