BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                      



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          |SENATE RULES COMMITTEE            |                   AB 335|
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                                 THIRD READING


          Bill No:  AB 335
          Author:   Solorio (D)
          Amended:  8/31/11 in Senate
          Vote:     21

           
           SENATE LABOR & INDUSTRIAL RELATIONS COMM.  :  6-0, 6/22/11
          AYES: Lieu, Wyland, DeSaulnier, Leno, Padilla, Yee
          NO VOTE RECORDED:  Runner

           SENATE APPROPRIATIONS COMMITTEE  :  8-0, 7/11/11
          AYES:  Kehoe, Walters, Alquist, Emmerson, Pavley, Price, 
            Runner, Steinberg
          NO VOTE RECORDED:  Lieu

          ASSEMBLY FLOOR  :  74-2, 6/1/11 - See last page for vote


           SUBJECT  :    Workers compensation:  notices

           SOURCE  :     CSAC Excess Insurance
                      California Coalition on Workers Compensation


           DIGEST  :    This bill requires the Administrative Director 
          (AD) of the Division of Workers Compensation, in 
          consultation with the Commission on Health and Safety and 
          Workers' Compensation (CHSWC) to prescribe reasonable rules 
          and regulations including notice of the right to consult 
          with an attorney, where appropriate,  for serving workers' 
          compensation claims notices on an employee.  This bill 
          requires the AD, in consultation with the CHSWC, to make 
          available on the Department of Industrial Relations' 
                                                           CONTINUED





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          Internet Web site, and make available at district offices, 
          informational material that describes the overall workers' 
          compensation claims process.  



           Senate Floor Amendments  of 8/31/11 add a provision to 
          require the Division of Workers' Compensation inform 
          injured workers of their right to consult with an attorney 
          on notices dealing with workers' compensation. 


           ANALYSIS  :    Existing law establishes a workers' 
          compensation system, administered by the AD of the Division 
          of Workers' Compensation (DWC) within the Department of 
          Industrial Relations (DIR), to compensate an employee for 
          injuries that arise out of, or in the course of, 
          employment. Employers are required to secure the payment of 
          workers' compensation for injuries incurred by their 
          employees.  Existing law establishes the CHSWC, within the 
          DIR, as a joint labor-management body created by the 
          workers' compensation reform legislation of 1993 and 
          charged with overseeing the health and safety and workers' 
          compensation system in California, and recommending 
          administrative and/or legislative modifications to improve 
          their operation. 

          Existing law provides for specified procedures to be used 
          in notifying employees regarding benefits and required 
          actions in pursuing a workers' compensation claim.  

          Existing law requires that specified notices be provided to 
          injured employees and prescribes the contents of notices 
          required to be posted, given to, or mailed to an employee.  
          The administrative director is responsible for prescribing 
          rules and regulations pertaining to these notices.  
          Existing law also contains numerous statutorily prescribed 
          statements that must be used in certain notices. 

          This bill requires the AD of the Division of Workers' 
          Compensation to prescribe rules and regulations regarding 
          notices that are provided to employees in the workers' 
          compensation system. 








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          Specifically, this bill: 

          1. Adds a requirement that the AD consult with the CHSWC 
             when prescribing the rules and regulations governing 
             notices required to be provided to employees regarding 
             their rights under the workers' compensation system. 

          2. Expands the subjects of information that benefit notices 
             shall include by adding notice of supplemental job 
             displacement benefits, rights concerning selection of a 
             personal treating physician, requests for comprehensive 
             medical evaluation, and offers of regular, modified, the 
             right to consult with an attorney, or alternative work.

          3. Requires the AD, in consultation with the CHSWC, to 
             develop, and make readily available, including on the 
             DWC Web site, informational material written in plain 
             language that describes the overall workers' 
             compensation claims system, including the rights and 
             obligations of employees and employers at every stage of 
             a claim when a notice is required.

          4. Adds a requirement that each notice prescribed by the 
             AD, as required by law, be in plain language and include 
             a citation to the place in the informational material 
             that discusses relevant information to enable employees 
             to understand the context of the notices. 

          5. Makes a number of conforming changes, such as deletion 
             of specific statutory language regarding notices, which 
             have the effect of implementing the above requirements.

           Comments
           
          In response to widespread concern that the system of 
          notifying injured workers of their rights, and how to 
          navigate, in the workers' compensation system was failing, 
          the CHSWC undertook an evaluation of the efficacy of the 
          notices that are provided to injured workers.  This 
          evaluation included working with all relevant stakeholders 
          to determine what the goals of these notices should be, 
          whether the goals were being met, and if not, what could be 
          done to improve the situation.








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          In July 2010, the CHSWC released a report, "Report on 
          Benefit Notices and Recommendation," which concluded that 
          there is consensus that currently-used benefit notices are:

           Too voluminous (wordy, redundant, and frequently contain 
            information that is not needed by the recipient).
           Complex, overwhelming, and frightening (e.g., "You may 
            lose important rights unless you . . . .").
           Difficult to understand (Indirect terminology, overly 
            legalistic), and at times misleading.
           Not standardized.
           Difficult for employers to keep updated.

          In addition, the CHSWC found that it was difficult for 
          injured workers to find information on their own, or obtain 
          answers to questions.  As a result, in addition to 
          improving the quality and effectiveness of the notices, the 
          CHSWC recommended that a plain language booklet be made 
          readily available on the Division's website and through 
          other means of delivery.

          This bill was introduced in order to implement the 
          recommendations made by the CHSWC. 

          The bill requires the AD of the DWC to work with CHSWC to 
          develop new benefit notices written in easily 
          understandable language as well as informational material 
          which describes the workers' compensation claims process 
          and the rights and obligations of both employers and 
          employees.

           FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  Yes   
          Local:  No

          According to the Senate Appropriations Committee:

                          Fiscal Impact (in thousands)
           
           Major Provisions          2011-12              2012-13   2013-14   
                                 Fund
           
          Develop and disseminate    Up to $100  Minor, absorbable 
          costs   Special*
          workers' compensation             annually 







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          claims notice information

          * Workers' Compensation Administration Fund

           SUPPORT :   (Verified  9/1/11) 

          CSAC Excess Insurance (co-source)
          California Coalition on Workers' Compensation (co-source)
          Acclamation Insurance Management Services
          Allied Managed Care
          Association of California Insurance Companies
          California Association of Joint Powers Authorities
          California Chamber of Commerce
          California Labor Federation
          California Manufacturers & Technology Association
          California Nurses Association
          California State Association of Counties
          League of California Cities

           ARGUMENTS IN SUPPORT  :    According to proponents of this 
          bill, today, injured workers receive notice after notice, 
          often written in legalese that is incomprehensible to most 
          workers.  They argue that an approach to streamline, 
          simplify and clarify these notices is long overdue.   
          Proponents argue that this bill will create better outcomes 
          for injured workers by providing them with more digestible 
          information at key points in the claims process.  According 
          to proponents, this should lead to a reduction in 
          frictional legal expenses that result from confusion and 
          poor communication.  Lastly, according to proponents, CHSWC 
          estimates that this legislation will provide a net savings 
          of over $42 million per year. 

           ASSEMBLY FLOOR  :  74-2, 6/1/11
          AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Beall, Bill 
            Berryhill, Block, Blumenfield, Bonilla, Bradford, 
            Brownley, Buchanan, Butler, Charles Calderon, Campos, 
            Carter, Cedillo, Chesbro, Cook, Davis, Dickinson, 
            Donnelly, Eng, Feuer, Fletcher, Fong, Fuentes, Furutani, 
            Beth Gaines, Galgiani, Gatto, Gordon, Grove, Hagman, 
            Halderman, Hall, Harkey, Hayashi, Roger Hernández, Hill, 
            Huber, Hueso, Huffman, Jones, Knight, Lara, Logue, Bonnie 
            Lowenthal, Ma, Mansoor, Mendoza, Miller, Mitchell, 
            Monning, Morrell, Nestande, Norby, Olsen, Pan, Perea, 







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            Portantino, Silva, Skinner, Smyth, Solorio, Swanson, 
            Torres, Valadao, Wagner, Wieckowski, Williams, Yamada, 
            John A. Pérez
          NOES: Conway, Nielsen
          NO VOTE RECORDED: Garrick, Gorell, Jeffries, V. Manuel 
            Pérez


          PQ:do  9/1/11   Senate Floor Analyses 

                         SUPPORT/OPPOSITION:  SEE ABOVE

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