BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  SB 826
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          SENATE THIRD READING
          SB 826 (Leno)
          As Amended  May 3, 2011
          Majority vote 

           SENATE VOTE  :31-8  
           
           INSURANCE           11-0        APPROPRIATIONS      12-5        
          
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          |Ayes:|Solorio, Hagman, Carter,  |Ayes:|Fuentes, Blumenfield,     |
          |     |Feuer, Grove, Hayashi,    |     |Bradford, Charles         |
          |     |Miller, Olsen, Skinner,   |     |Calderon, Campos, Davis,  |
          |     |Torres, Wieckowski        |     |Gatto, Hall, Hill, Lara,  |
          |     |                          |     |Mitchell, Solorio         |
          |     |                          |     |                          |
          |-----+--------------------------+-----+--------------------------|
          |     |                          |Nays:|Harkey, Donnelly,         |
          |     |                          |     |Nielsen, Norby, Wagner    |
           ----------------------------------------------------------------- 
           
          SUMMARY  :  Establishes penalties for the failure of an employer 
          to report claim information to the Workers' Compensation 
          Information System (WCIS).  Specifically,  this bill  :   

          1)Requires the Administrative Director (AD) of the Division of 
            Workers' Compensation (DWC) to assess administrative penalties 
            for WCIS data reporting violations.

          2)Requires the AD to promulgate a schedule of penalties capped 
            at $5,000 against a claims administrator in any given year, 
            that provides for no more than $100 per violation for 
            violations where a report is not submitted or not accepted, 
            and no more than $50 per violation for violations involving 
            errors or late filings.

          3)Provides that no penalty shall be imposed pursuant to other 
            specified provisions of law relating to claims audits if the 
            violations are subject to sanctions pursuant to the bill's 
            provisions.

          4)Requires the schedule that the AD promulgates to exclude 
            violations below specified thresholds, as established by the 
            AD, to be not less than 3% of the reports filed, and 








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            authorizes to AD to establish higher thresholds for data 
            elements that are not reasonably available.

          5)Requires the AD to publish an annual report on the compliance 
            of claims administrators, and authorizes the administrators to 
            be named in the report.

           EXISTING LAW  :

          1)Provides for a comprehensive system of workers' compensation 
            benefits for workers injured on the job, paid by employers, or 
            insurers on behalf of employers.

          2)Establishes the WCIS.

          3)Requires claims administrators to submit a range of claims 
            related information to the WCIS for purposes of research into 
            claims and claims costs.

           FISCAL EFFECT  :  According to the Assembly Appropriations 
          Committee:

          1)Costs associated with this legislation should be minor and 
            absorbable within existing DWC resources.

          2)Additional revenue from the penalties assessed under this 
            legislation could exceed $200,000 per year.  ÝWorkers 
            Compensation Administration Revolving Fund]

           COMMENTS  :  According to the sponsor of this bill, Small Business 
          California, the bill is designed to address the lack of 
          enforcement authority to ensure that appropriate data is 
          submitted to the WCIS.  A recent Commission on Health and Safety 
          and Workers' Compensation (CHSWC) study concluded that 
          compliance issues have rendered the quality of data collected by 
          WCIS of limited value.  The bill is structured so that minor 
          errors on marginally relevant data fields (the thresholds the AD 
          is authorized to adopt) do not result in penalties, while at the 
          same time establishing an incentive to accurately provide 
          substantive data.

           
          Analysis Prepared by  :    Mark Rakich / INS. / (916) 319-2086 









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