BILL ANALYSIS Ó ------------------------------------------------------------ |SENATE RULES COMMITTEE | AB 335| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ------------------------------------------------------------ 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 AB 335 Page 2 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. AB 335 Page 3 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. AB 335 Page 4 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 AB 335 Page 5 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, AB 335 Page 6 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 **** END ****