Employers and unions have come to an agreement with the implicit blessing of labor insurers to cut medical costs and use the savings to increase cash benefits for disabled workers and lower employers’ insurance premiums.
The two factions excluded from the deal – lawyers who specialize in labor cases and providers of medical care, therapy and rehabilitation – howled. But with Brown’s blessing and the political clout of the unions, it was put into effect.
It worked as planned, actually too well in the eyes of the two boisterous factions and unions, who complained that employers benefited more than their injured workers.
The share of insurance costs in payroll is down more than two-thirds from its 2003 peak, due to both those signed by Brown and the changes introduced by legislation a decade earlier from predecessor Arnold Schwarzenegger were made. However, California employers still pay the fourth highest labor cost in the country, according to Oregon’s annual state-to-state compilation.
In response to the COVID-19 pandemic, lawmaker and Governor Gavin Newsom decided last year that some medical professionals would assume that certain illnesses would qualify them for compensation benefits without having to prove links to their work.
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