BILL ANALYSIS Ó
AB 1643
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Date of Hearing: May 18, 2016
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez, Chair
AB
1643 (Gonzalez) - As Amended March 16, 2016
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Urgency: No State Mandated Local Program: NoReimbursable: No
SUMMARY:
This bill prohibits the use of certain gender-related
characteristics in the calculation of permanent disability (PD)
benefits for injuries occurring on or after January 1, 2017.
Specifically, this bill:
1)Prohibits granting the disabling effects of breast cancer a
lower impairment rating than granted to the disabling effects
of prostate cancer.
2)Prohibits apportionment based on pregnancy, osteoporosis,
menopause, or carpal tunnel syndrome, when apportioning
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permanent disability with respect to a physical injury.
3)Prohibits apportionment based on prior psychiatric disability
or impairment caused by pregnancy, osteoporosis, menopause, or
carpal tunnel syndrome, when apportioning permanent disability
with respect to a psychiatric injury.
FISCAL EFFECT:
1)On balance, it appears this bill has the potential to increase
administrative costs in the workers' compensation system.
Specifically, the Department of Industrial Relations (DIR)
expects the language prohibiting apportionment to certain
preexisting conditions to result in an increase in judicial
workload and commensurate costs to the Workers' Compensation
Appeals Board (WCAB). DIR estimates, based on a number of
assumptions, including 33,000 additional judicial hearings (an
average of three per each of 11,000 cases), increased cost
pressure to WCAB in the range of $6 million. (Workers
Compensation Administration Revolving Fund). DIR indicates out
of 90,000 permanent disability cases, 11,000 cases are women
and include apportionment.
However, staff notes it is difficult or impossible to project
such costs with certainty, and indeed there are countervailing
factors at play as well. For instance, the number of women
who receive an apportionment determination could be reduced
somewhat, as the bill prohibits apportionment to certain
factors, such as carpal tunnel syndrome and osteoporosis.
Conversely, the bill is likely to result in increased
litigation as attorneys seek to demonstrate apportionment
determinations are related to one of the factors no longer
allowable, such as a condition attributable to pregnancy or
menopause. Some cases among males may also be subject to
similar impacts, although they would be far fewer, as all of
the conditions listed are more common in, or exclusively
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among, females. Thus, though there does appear to be
potential for significant net cost increase, the magnitude is
unknown.
2)Unknown, likely significant increased workers' compensation
costs to the state as an employer for higher permanent partial
disability compensation as a result of fewer allowable
apportionments and increased compensation for job-related
breast cancers (various funds). Breast cancer PD awards
largely affect public-sector employees, like police and
firefighters, due to presumptions of compensability, whereas
in other employment sectors it is difficult to prove breast
cancer is job-related. These costs would also impact local
governments whose workers have similar presumptions.
COMMENTS:
1)Purpose. According to the author, this bill is needed to
eliminate bias in the workers' compensation system, by barring
consideration of certain conditions more likely to affect
women when considering permanent disability awards. The
California Applicants' Attorney Association (CAAA), the
sponsor of this bill, indicates these are narrowly crafted
changes that will ensure women receive the permanent
disability they deserve after being injured on the job.
2)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. Workers' compensation
benefits include medical treatment and indemnity benefits,
including temporary and permanent disability benefits. Gender
bias in workers' compensation was the subject of an
informational hearing by the Assembly Select Committee on
Women in the Workplace on February 23, 2016, where this bill
and related issues were discussed. Speakers noted the lack of
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adequate compensation for a woman with breast cancer who has a
mastectomy, as compared to other compensation for other
conditions.
3)Determining PD Awards. Once an individual's condition is
permanent and stationary, they can be evaluated for PD
benefits.
a) Impairment. Impairment refers to how the injury affects
one's ability to do normal life activities. Most people
receiving PD benefits are not 100% disabled, but instead
receive permanent partial disability based on a partial
loss of function. 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), which is
expressed as a percentage of impairment. A treating
physician issues a report that provides a WPI value and an
apportionment determination.
b) Apportionment. Physician's reports must include an
apportionment determination, which is a determination that
some percentage of a disability is not work-related.
Apportioning a percentage of the injury to a preexisting
condition, if applicable, attempts to ensure employers are
only responsible to provide permanent disability
compensation for a disability that is work-related. This
bill bars apportionment based on the factors listed,
including pregnancy, menopause, carpal tunnel, and
osteoporosis, regardless of whether the condition is
work-related.
c) Disability evaluation. Disability means how impairment
affects one's ability to work. A disability rating is
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issued, which is expressed as a percentage. The rating is
based on the WPI value, applicable apportionment, and other
relevant factors such as age and occupation. After the
amount of PD in a claim is determined, there is usually a
settlement or award for benefits, which the claims
administrator or the injured party's attorney can assist to
obtain.
d) Appeals and litigation. There are a number of avenues
for appeals if the injured party disagrees with a medical
report on impairment or an apportionment determination, or
a disability rating. The process depends on whether he or
she is represented by an attorney. He or she can appeal to
a DWC to have the rating reconsidered, and/or present the
case to a workers' compensation administrative law judge at
the WCAB. If there is a dispute about impairment and
apportionment determinations, an injured worker can request
a qualified medical examiner (QME), who is selected from a
panel, or an agreed medical examiner (AME) to provide a new
report.
4)Breast Cancer in AMA Guides. The AMA Guide, 5th Edition rates
the removal of female breasts at a WPI of zero percent, while
the removal of a prostrate generally rates at 16-20% WPI.
Thus, prostrate removal currently translates into a higher PD
rating than female breast removal. Physicians have some
flexibility to use other parts of the 5th Edition to
accurately describe the impairment, if needed. The more
recent AMA Guide, 6th Edition, includes a higher rating for
mammary disorders, which range from 0 -15% WPI, where a 15%
WPI rating would apply to mastectomy not amenable to cosmetic
or reconstructive surgery.
5)Support. The California Applicants Attorneys and employment
lawyers, advocates for women's issues, public safety, and some
labor groups support this bill. Supporters indicate the AMA
Guides inappropriately assign little to no value to the loss
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of a woman's breasts, and that it is also inappropriate to
apportion disability to non-industrial causation if that
causation is a factor or condition that is uniquely or
predominantly based on gender.
6)Opposition. Groups representing numerous private employers;
cities, counties and other public employers; insurance
companies; and the California Coalition for Workers'
Compensation are opposed to this bill. Opponents contend this
bill will undermine objectivity in workers' compensation
permanent disability ratings, and require employers to pay
monetary awards to injured workers for disease or disability
that did not result from a workplace injury. They indicate
lack of evidence that discrimination is occurring under
current law, and argue current law already clearly prohibits
apportionment based on age, gender, or other characteristics.
7)Prior Legislation. AB 305 (Gonzalez) of 2015 was substantially
similar to this bill, and was vetoed. The veto message
stated,
"This bill prohibits the use of certain gender-related
characteristics in the calculation of permanent
disability benefits for injuries occurring on or after
January 1, 2016. The workers compensation system must be
free of gender-bias. No group should receive less in
benefits because of an immutable characteristic.
However, this bill is based on a misunderstanding of the
American Medical Association's evidence-based standard,
which is the foundation of the permanent disability
ratings, and replaces it with an ill-defined and
unscientific standard."
As it is similar to AB 305, this bill does not appear to
address the veto message.
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Analysis Prepared by:Lisa Murawski / APPR. / (916)
319-2081