California Workers' Compensation Reform Cuts Benefits In Half; Insurers Earn Record Profits and Rip-Off Workers
October 16, 2007 -- California employee benefits have been cut in half since the birth of Governor Arnold Schwarzenegger's 2004 Workers' Compensation Reform (SB 899) three years ago. A study by The California Commission on Health, Safety and Workers' Compensation, has confirmed that the benefits for permanently disabled workers have been reduced on average by 50 to 70 percent. Workers are saddled with the financial burden of having to make up the difference out of their own pockets. The nation's average benefits for permanently disabled workers is $595 a week, while those in California receive only $270 a week in benefits. California ranks 4th lowest in the nation for weekly benefits for disabled workers. Ironically, in a state that is known for having one of the highest costs of living, California benefits are ranked as one of the lowest in the nation.
Meanwhile, a study by the Workers' Compensation Insurance Rating Bureau has shown that profits of insurance agencies are far exceeding the cost of California workers' benefits since enactment of the Governor's Workers' Compensation Reform (SB 899) in 2004. Benefits disbursed to injured workers, including permanent and temporary disability, and medical treatment totaled $19.8 billion, while insurer profits totaled $27.7 billion. Workers' Compensation Insurance companies experienced a significant increase in profits due to workers' benefits being reduced for California workers.
A comparative analysis of California Workers' Compensation Laws done by the US Chamber of Commerce has revealed the differences between average benefits of the nation versus California. "The national average award for loss of a leg at the hip is $114,522. In California it's $61,435, 6th lowest in the nation. Loss of an eye? The national average award is $74,558. In California it's $17,714, lowest in the nation. For the loss of a foot the national average is $80,977. In California it's $28,820. Loss of a thumb? California's benefits are 7th lowest in the nation." (California Progress Report, May 17, 2007)
Currently pending legislation, SB 936, could potentially fix some of the damage done by SB 899 by providing benefits for those that have become injured on the job, and would not require any cost increase for employers. SB 936, sponsored by Senator Don Perata from Oakland, California, tries to reestablish fairness to those that have had their benefits reduced more than 50 percent by the prior regulatory action.
At Brayton Purcell, we are experienced in handling all types of workers' compensation claims, with extensive experience in those based on asbestos exposure, beryllium exposure and repetitive stress syndrome. We are particularly knowledgeable about asbestos-related illnesses, and can explore any options that you may have beyond a workers' compensation claim. If you have an employment-related injury, please feel free to contact us to learn more about your legal rights.