BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
AB 305 (Gonzalez) - Workers' compensation: permanent disability
apportionment
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|Version: June 30, 2015 |Policy Vote: L. & I.R. 4 - 1 |
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|Urgency: No |Mandate: No |
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|Hearing Date: July 13, 2015 |Consultant: Robert Ingenito |
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This bill meets the criteria for referral to the Suspense File.
Bill
Summary: For injuries occurring after January 1, 2016, AB 305
would (1) prohibit apportionment if pregnancy, menopause, or
menopause-caused osteoporosis is contemporaneous with the
injured worker's claimed injury, (2) prohibit apportionment in
cases of psychiatric injury in specified instances, and (3)
require that breast cancer not be less than the comparable
impairment rating for prostate cancer.
Fiscal
Impact:
The Department of Industrial Relations (DIR) would incur
costs (special funds) of $4.25 million in the first year,
and $4 million annually thereafter to implement the
provisions of the bill.
AB 305 (Gonzalez) Page 1 of
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As a direct employer, the State would incur increased
permanent disability costs due to breast cancer. The
magnitude is unknown, but potentially significant.
The bill also would result in increased litigation costs
to the State as a direct employer. The magnitude is
unknown, but potentially significant.
Background: Current law establishes a workers' compensation system that
provides benefits to an employee who suffers from an injury or
illness that occurs during the course of employment,
irrespective of fault. This system requires all employers to
secure payment of benefits by either (1) securing the consent of
DIR to self-insure, or (2) securing insurance against liability
from an insurance company authorized by the State.
Under current law, when doctors are determining the nature and
severity of an occupational injury, the American Medical
Association (AMA) Guides to the Evaluation of Permanent
Impairment (5th Edition) must be used to measure physical
impairment and determine an injured worker's whole person
impairment (WPI).
When physicians prepare a report regarding whether a claimed
workplace injury is permanently disabling, the physician must
determine both (1) causation, and (2) what percentage of the
injury is due to non-occupational issues, including prior
workplace injuries. An injured worker's PD award is then
adjusted down by this percentage. Only a physician can make the
determination whether and to what extent if apportionment is
appropriate.
Additionally, current law creates the Permanent Disability
Ratings Schedule (PDRS), which increases the WPI by 40 percent
and adjusts for occupation and age to calculate a percentage of
permanent disability, also known as a PD rating. AMA Guides rate
the removal of female breasts at a WPI of zero percent, while
the removal of a prostrate generally rates at 16 to 20 percent
WPI. Thus, prostrate removal currently translates into a higher
PD rating than female breast removal.
AB 305 (Gonzalez) Page 2 of
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Proposed Law:
With respect to injuries occurring on or after January 1, 2016,
this bill would do the following:
Prohibit apportionment in cases of physical injury based
on any of the following conditions if those conditions are
contemporaneous with the claimed physical injury: (1)
pregnancy; (2) menopause; and (3) osteoporosis casually
related to menopause.
Prohibit apportionment in cases of psychiatric injury
caused by sexual harassment or any of the conditions listed
above if the conditions are contemporaneous with the
psychiatric injury.
Require that WPI ratings for breast cancer and its
sequelae shall in no event be less than comparable WPI
ratings for prostate cancer and its sequelae.
Related
Legislation: AB 1155 (Alejo) of 2011 addressed apportionment by
broadly prohibiting the use of the protected classes defined in
the Unruh Civil Rights Act as a basis to apportion permanent
disability awards. The bill was vetoed by the Governor.
Staff Comments: The Office of the Legislative Counsel has keyed
this bill "non-fiscal." However, the purview of this Committee,
pursuant to Joint Rule 10.5, is to review and analyze bills that
would, among other things, result in a substantial expenditure
of state money. Thus, even though AB 305 was keyed "non-fiscal,"
the Committee requested the bill to examine the extent to which
it might potentially increase both workload and state costs. AB
305 has the potential to create significant fiscal pressure on
the state in the following ways: (1) increased litigation,
leading to higher Workers Compensation Appeals Board (WCAB)
utilization, (2) increased PD costs due to breast cancer for the
State of California as a direct employer (particularly for peace
officers), and (3) increased litigation costs for the State of
AB 305 (Gonzalez) Page 3 of
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California as an employer.
Regarding WCAB utilization, it is assumed that there are about
90,000 claims annually where PD is owed. If, according to the
April 2007, Commission on Health and Safety and Workers'
Compensation (CHSWC) report, 10.5 percent of disability
evaluations include an apportionment component, then there will
be roughly 9,000 claims per year where the conditions listed in
the bill would have an impact.
The extent to which the effects of menopause, pregnancy,
osteoporosis and a psychiatric injury from either those
conditions or sexual harassment will actually result in the
apportionment of disability is unknown. However, the prevalence
of these conditions in women would likely produce more
litigation to differentiate and identify the root cause of an
apportionable impairment. If the 9,000 claims were to be
disputed, but absent the bill they would not have been
litigated, AB 305 would create a 13 percent increase in judicial
workload of disputed cases. DIR estimates the additional
workload would result in increased costs of about $4 million
annually.
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