New CA Workers’ Compensation Law: SB 863, Saves Employers Money and Helps Injured Workers

1 Oct

The California Legislature passed and Governor Brown signed the most significant workers’ compensation benefit increase and reform package since the 2004 reform legislation sponsored by then Governor Arnold Schwarzenegger. SB 863, which takes effect January 1, 2013, was strongly supported by employers, unions and the Governor’s office, over the objections of attorneys and many workers’ compensation medical providers. It is anticipated that the legislation will provide a net decrease in total system costs to California employers of $872 million in 2013 and an additional savings of $292 million in 2014, even after providing increased benefits to injured workers of $310 million in 2013 and $530 million in 2014.

This new law increases permanent partial disability benefits phased in during 2013 and 2014 offset by a series of reforms that are intended to provide result in reduction of litigation costs and hopefully increased predictability in system costs. The reforms include more reliable medical control by employers, if they use the “Medical Provider Network” process available to them.

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