BILL NUMBER: AB 486 CHAPTERED
BILL TEXT
CHAPTER 866
FILED WITH SECRETARY OF STATE SEPTEMBER 26, 2002
APPROVED BY GOVERNOR SEPTEMBER 25, 2002
PASSED THE SENATE AUGUST 31, 2002
PASSED THE ASSEMBLY AUGUST 31, 2002
AMENDED IN SENATE AUGUST 26, 2002
INTRODUCED BY Assembly Member Calderon
FEBRUARY 21, 2001
An act to amend Sections 78, 123.5, 123.6, 3201.5, 3501, 3742,
4453, 4600.5, 4614, 4702, and 5502 of, and to add Sections 3201.7,
3701.8, 5307.21, and 6354.7 to, the Labor Code, and to amend Section
86 of Chapter 6 of the Statutes of 2002, relating to workers'
compensation.
LEGISLATIVE COUNSEL'S DIGEST
AB 486, Calderon. Workers' compensation: administration and
benefits.
(1) Existing law provides that the Commission on Health and Safety
and Workers' Compensation in the Department of Industrial Relations
is to be funded by appropriations from the Workplace Health and
Safety Revolving Fund, into which certain civil and administrative
penalties are deposited. Existing law requires the commission to
review and approve applications from employers and employee
organizations, or both, for grants to assist in establishing
effective occupational injury and illness prevention programs.
This bill would instead provide for the deposit of these penalties
in the Workers' Compensation Administration Revolving Fund. This
bill would authorize the department to expend these funds upon
approval by the commission, and upon appropriation from the fund by
the Legislature, to fund the grants and other activities and expenses
of the commission.
(2) Existing law provides for the Department of Industrial
Relations to be divided into at least 6 divisions, including the
Division of Workers' Compensation, which is under the direction of an
administrative director. Existing law provides that the
administrative director has various powers and duties with respect to
the Workers' Compensation Appeals Board and workers' compensation
administrative law judges who hear appeals of workers' compensation
claims.
This bill would add various provisions, including certain
qualifications and ethics requirements for workers' compensation
administrative law judges and other provisions relating to the
operation of the workers' compensation courts.
This bill would also require the administrative director, in
consultation with the court administrator and the Commission on
Judicial Performance, to adopt regulations to enforce the applicable
ethics requirements for workers' compensation administrative law
judges, and would authorize the court administrator to enforce these
regulations.
(3) Existing law authorizes collective bargaining agreements
between a private employer or groups of employers engaged in certain
activities and a recognized or certified exclusive bargaining
representative that establishes a dispute resolution process for
workers' compensation instead of the hearing before the Workers'
Compensation Appeals Board and its workers' compensation
administrative law judges, or that provides for specified other
alternative workers' compensation programs.
This bill would enact similar provisions with respect to employers
in the aerospace and timber industries, as specified. By requiring
certain information in connection with these provisions to be
submitted by an employer under penalty of perjury, this bill would
expand the definition of the crime of perjury, thereby imposing a
state-mandated local program.
(4) Existing law makes certain conclusive presumptions regarding a
child's or spouse's dependency on a deceased employee for support as
it pertains to workers' compensation benefits.
This bill would require a finding by a trier of fact, as
specified, as to the physical or mental incapacitation to earn by a
dependent child of any age.
(5) Existing law requires every employer, except as specified, to
secure the payment of compensation by either being insured against
liability to pay compensation, or by securing from the Director of
Industrial Relations a certificate of consent to self-insure.
Existing law establishes the Self-Insurers' Security Fund,
governed by a 7-member board of trustees and administered by the
Director of Industrial Relations, to provide for the continuation of
workers' compensation benefits delayed as a result of the failure of
a private, self-insured employer to meet its compensation obligations
when the employer's security deposit is either inadequate or not
immediately accessible for the payment of benefits.
Existing law requires every private, self-insuring employer to
secure incurred liabilities for the payment of workers' compensation
by making a deposit based on estimated future liability for
compensation.
This bill would authorize the director to provide by regulation
for an alternative security system, as an alternative to that
required by existing law, that would require private, self-insured
employers to collectively secure all, or a portion of, their
aggregate liabilities through the Self-Insurers' Security Fund.
(6) Existing law requires the Self-Insurers' Security Fund to
establish bylaws in order to carry out the purposes and
responsibilities of the fund.
This bill would require that those bylaws include any obligations
imposed on the director by the above provisions relating to the
alternative security system whereby all private, self-insureds,
collectively, would be required to secure all, or a portion of, their
aggregate liabilities through the Self-Insurers' Security Fund. The
bill would also authorize the director to impose specified financial
obligations on fund members to satisfy the security requirements set
by the director with respect to participation in the fund.
(7) Existing law provides certain methods for determining workers'
compensation benefits payable to a worker or his or her dependents
for purposes of temporary disability, permanent total disability,
permanent partial disability, and in case of death.
This bill would provide for increased temporary disability and
permanent partial disability and death benefits for injuries or
deaths occurring on or after January 1, 2003, with additional
increases in benefits phased in over several years.
(8) Existing law establishes certification requirements for
specified health care organizations that provide health care services
for injured employees.
This bill would revise these certification requirements.
(9) Existing law provides for the payment of death benefits to the
dependents of an injured employee who has died. Existing law
establishes varying amounts of death benefits, in the case of
dependents who are totally or partially dependent, or both, based on
the date of the injury and on the number of dependent children.
This bill would increase the amount of those death benefits for
injuries occurring on or after January 1, 2006.
(10) Existing law requires injured employees to be provided with
medical services, including surgical treatment.
The bill would provide that the administrative director has the
sole authority to develop an outpatient surgery facility fee schedule
for services not performed under contract.
(11) Existing law establishes various procedures for workers'
compensation claims proceedings, and gives exclusive jurisdiction to
the Workers' Compensation Appeals Board regarding those claims.
Existing law establishes procedures for the filing of pleadings, and
for setting the times for hearings.
This bill would make changes to that procedure and would require a
court administrator, rather than the Workers' Compensation Appeals
Board, to establish various forms and to perform various
administrative functions relating to these proceedings. This bill
would also require the court administrator to establish a priority
conferences calendar in specified cases, and require that the
conferences shall be conducted by a workers' compensation
administrative law judge, as prescribed. This bill would provide
that if the dispute cannot be resolved at the conference, the case
would be set for trial, as specified.
(12) Existing law requires workers' compensation insurers to
maintain or provide occupational safety and health loss control
consultation services certified by the Director of Industrial
Relations.
The bill would require the Commission on Health and Safety and
Workers' Compensation to establish and maintain a worker and
occupational safety and health training and education program and an
insurance loss control services coordinator position, to be funded
from the Workers' Occupational Safety and Health Education Fund that
would be created by the bill. The bill would require the director to
levy and collect fees from workers' compensation insurers for
purposes of the program, with the fees to be deposited in the Workers'
Occupational Safety and Health Education Fund. Moneys in the fund
would be available for expenditure for the above purposes upon
appropriation by the Legislature.
(13) This bill would make related and technical changes.
(14) The California Constitution requires the state to reimburse
local agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
This bill would provide that no reimbursement is required by this
act for a specified reason.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 78 of the Labor Code is amended to read:
78. (a) The commission shall review and approve applications from
employers and employee organizations, as well as applications
submitted jointly by an employer organization and an employee
organization, for grants to assist in establishing effective
occupational injury and illness prevention programs. The commission
shall establish policies for the evaluation of these applications and
shall give priority to applications proposing to target high-risk
industries and occupations, including those with high injury or
illness rates, and those in which employees are exposed to one or
more hazardous substances or conditions or where there is a
demonstrated need for research to determine effective strategies for
the prevention of occupational illnesses or injuries.
(b) Civil and administrative penalties assessed and collected
pursuant to Sections 129.5 and 4628 shall be deposited in the Workers'
Compensation Administration Revolving Fund. Moneys in the fund,
when appropriated by the Legislature to fund the grants under
subdivision (a) and other activities and expenses of the commission
set forth in this code, shall be expended by the department, upon
approval by the commission.
SEC. 2. Section 123.5 of the Labor Code is amended to read:
123.5. (a) Workers' compensation administrative law judges
employed by the administrative director and supervised by the court
administrator pursuant to this chapter shall be taken from an
eligible list of attorneys licensed to practice law in this state,
who have the qualifications prescribed by the State Personnel Board.
In establishing eligible lists for this purpose, state civil service
examinations shall be conducted in accordance with the State Civil
Service Act (Part 2 (commencing with Section 18500) of Division 5 of
Title 2 of the Government Code). Every workers' compensation judge
shall maintain membership in the State Bar of California during his
or her tenure.
A workers' compensation administrative law judge may not receive
his or her salary as a workers' compensation administrative law judge
while any cause before the workers' compensation administrative law
judge remains pending and undetermined for 90 days after it has been
submitted for decision.
(b) All workers' compensation administrative law judges appointed
on or after January 1, 2003, shall be attorneys licensed to practice
law in California for five or more years prior to their appointment
and shall have experience in workers' compensation law.
SEC. 3. Section 123.6 of the Labor Code, as amended by Chapter 6
of the Statutes of 2002, is amended to read:
123.6. (a) All workers' compensation administrative law judges
employed by the administrative director and supervised by the court
administrator shall subscribe to the Code of Judicial Ethics adopted
by the Supreme Court pursuant to subdivision (m) of Section 18 of
Article VI of the California Constitution for the conduct of judges
and shall not otherwise, directly or indirectly, engage in conduct
contrary to that code or to the commentary to the Code of Judicial
Ethics made by the California Judges Association.
In consultation with both the court administrator and the
Commission on Judicial Performance, the administrative director shall
adopt regulations to enforce this section. Existing regulations
shall remain in effect until new regulations based on the
recommendations of the court administrator and the Commission on
Judicial Performance have become effective. To the extent possible,
the rules shall be consistent with the procedures established by the
Commission on Judicial Performance for regulating the activities of
state judges, and, to the extent possible, with the gift, honoraria,
and travel restrictions on legislators contained in the Political
Reform Act of 1974 (Title 9 (commencing with Section 81000) of the
Government Code). The court administrator shall have the authority
to enforce the rules adopted by the administrative director.
(b) Honoraria or travel allowed by the court administrator, and
not otherwise prohibited by this section in connection with any
public or private conference, convention, meeting, social event, or
like gathering, the cost of which is significantly paid for by
attorneys who practice before the board, may not be accepted unless
the court administrator has provided prior approval in writing to the
workers' compensation administrative law judge allowing him or her
to accept those payments.
SEC. 4. Section 3201.5 of the Labor Code is amended to read:
3201.5. (a) Except as provided in subdivisions (b) and (c), the
Department of Industrial Relations and the courts of this state shall
recognize as valid and binding any provision in a collective
bargaining agreement between a private employer or groups of
employers engaged in construction, construction maintenance, or
activities limited to rock, sand, gravel, cement and asphalt
operations, heavy-duty mechanics, surveying, and construction
inspection and a union that is the recognized or certified exclusive
bargaining representative that establishes any of the following:
(1) An alternative dispute resolution system governing disputes
between employees and employers or their insurers that supplements or
replaces all or part of those dispute resolution processes contained
in this division, including, but not limited to, mediation and
arbitration. Any system of arbitration shall provide that the
decision of the arbiter or board of arbitration is subject to review
by the appeals board in the same manner as provided for
reconsideration of a final order, decision, or award made and filed
by a workers' compensation administrative law judge pursuant to the
procedures set forth in Article 1 (commencing with Section 5900) of
Chapter 7 of Part 4 of Division 4, and the court of appeals pursuant
to the procedures set forth in Article 2 (commencing with Section
5950) of Chapter 7 of Part 4 of Division 4, governing orders,
decisions, or awards of the appeals board. The findings of fact,
award, order, or decision of the arbitrator shall have the same force
and effect as an award, order, or decision of a workers'
compensation administrative law judge. Any provision for arbitration
established pursuant to this section shall not be subject to
Sections 5270, 5270.5, 5271, 5272, 5273, 5275, and 5277.
(2) The use of an agreed list of providers of medical treatment
that may be the exclusive source of all medical treatment provided
under this division.
(3) The use of an agreed, limited list of qualified medical
evaluators and agreed medical evaluators that may be the exclusive
source of qualified medical evaluators and agreed medical evaluators
under this division.
(4) Joint labor management safety committees.
(5) A light-duty, modified job or return-to-work program.
(6) A vocational rehabilitation or retraining program utilizing an
agreed list of providers of rehabilitation services that may be the
exclusive source of providers of rehabilitation services under this
division.
(b) Nothing in this section shall allow a collective bargaining
agreement that diminishes the entitlement of an employee to
compensation payments for total or partial disability, temporary
disability, vocational rehabilitation, or medical treatment fully
paid by the employer as otherwise provided in this division. The
portion of any agreement that violates this subdivision shall be
declared null and void.
(c) Subdivision (a) shall apply only to the following:
(1) An employer developing or projecting an annual workers'
compensation insurance premium, in California, of two hundred fifty
thousand dollars ($250,000) or more, or any employer that paid an
annual workers' compensation insurance premium, in California, of two
hundred fifty thousand dollars ($250,000) in at least one of the
previous three years.
(2) Groups of employers engaged in a workers' compensation safety
group complying with Sections 11656.6 and 11656.7 of the Insurance
Code, and established pursuant to a joint labor management safety
committee or committees, that develops or projects annual workers'
compensation insurance premiums of two million dollars ($2,000,000)
or more.
(3) Employers or groups of employers that are self-insured in
compliance with Section 3700 that would have projected annual workers'
compensation costs that meet the requirements of, and that meet the
other requirements of, paragraph (1) in the case of employers, or
paragraph (2) in the case of groups of employers.
(4) Employers covered by an owner or general contractor provided
wrap-up insurance policy applicable to a single construction site
that develops workers' compensation insurance premiums of two million
dollars ($2,000,000) or more with respect to those employees covered
by that wrap-up insurance policy.
(d) Employers and labor representatives who meet the eligibility
requirements of this section shall be issued a letter by the
administrative director advising each employer and labor
representative that, based upon the review of all documents and
materials submitted as required by the administrative director, each
has met the eligibility requirements of this section.
(e) The premium rate for a policy of insurance issued pursuant to
this section shall not be subject to the requirements of Section
11732 or 11732.5 of the Insurance Code.
(f) No employer may establish or continue a program established
under this section until it has provided the administrative director
with all of the following:
(1) Upon its original application and whenever it is renegotiated
thereafter, a copy of the collective bargaining agreement and the
approximate number of employees who will be covered thereby.
(2) Upon its original application and annually thereafter, a valid
and active license where that license is required by law as a
condition of doing business in the state within the industries set
forth in subdivision (a) of Section 3201.5.
(3) Upon its original application and annually thereafter, a
statement signed under penalty of perjury, that no action has been
taken by any administrative agency or court of the United States to
invalidate the collective bargaining agreement.
(4) The name, address, and telephone number of the contact person
of the employer.
(5) Any other information that the administrative director deems
necessary to further the purposes of this section.
(g) No collective bargaining representative may establish or
continue to participate in a program established under this section
unless all of the following requirements are met:
(1) Upon its original application and annually thereafter, it has
provided to the administrative director a copy of its most recent
LM-2 or LM-3 filing with the United States Department of Labor, along
with a statement, signed under penalty of perjury, that the document
is a true and correct copy.
(2) It has provided to the administrative director the name,
address, and telephone number of the contact person or persons of the
collective bargaining representative or representatives.
(h) Commencing July 1, 1995, and annually thereafter, the Division
of Workers' Compensation shall report to the Director of the
Department of Industrial Relations the number of collective
bargaining agreements received and the number of employees covered by
these agreements.
(i) By June 30, 1996, and annually thereafter, the Administrative
Director of the Division of Workers' Compensation shall prepare and
notify Members of the Legislature that a report authorized by this
section is available upon request. The report based upon aggregate
data shall include the following:
(1) Person hours and payroll covered by agreements filed.
(2) The number of claims filed.
(3) The average cost per claim shall be reported by cost
components whenever practicable.
(4) The number of litigated claims, including the number of claims
submitted to mediation, the appeals board, or the court of appeal.
(5) The number of contested claims resolved prior to arbitration.
(6) The projected incurred costs and actual costs of claims.
(7) Safety history.
(8) The number of workers participating in vocational
rehabilitation.
(9) The number of workers participating in light-duty programs.
The division shall have the authority to require those employers
and groups of employers listed in subdivision (c) to provide the data
listed above.
(j) The data obtained by the administrative director pursuant to
this section shall be confidential and not subject to public
disclosure under any law of this state. However, the Division of
Workers' Compensation shall create derivative works pursuant to
subdivisions (h) and (i) based on the collective bargaining
agreements and data. Those derivative works shall not be
confidential, but shall be public. On a monthly basis the
administrative director shall make available an updated list of
employers and unions entering into collective bargaining agreements
containing provisions authorized by this section.
SEC. 5. Section 3201.7 is added to the Labor Code, to read:
3201.7. (a) Except as provided in subdivisions (b) and (c), the
Department of Industrial Relations and the courts of this state shall
recognize as valid and binding any provision in a collective
bargaining agreement between a private employer or groups of
employers engaged in the aerospace or timber industries and a union
that is the recognized or certified exclusive bargaining
representative that establishes any of the following:
(1) An alternative dispute resolution system governing disputes
between employees and employers or their insurers that supplements or
replaces all or part of those dispute resolution processes contained
in this division, including, but not limited to, mediation and
arbitration. Any system of arbitration shall provide that the
decision of the arbiter or board of arbitration is subject to review
by the appeals board in the same manner as provided for
reconsideration of a final order, decision, or award made and filled
by a workers' compensation administrative law judge pursuant to the
procedures set forth in Article 1 (commencing with Section 5900) of
Chapter 7 of Part 4 of Division 4, and the court of appeal pursuant
to the procedures set forth in Article 2 (commencing with Section
5950) of Chapter 7 of Part 4 of Division 4, governing orders,
decisions, or awards of the appeals board. The findings of fact,
award, order, or decision of the arbitrator shall have the same force
and effect as an award, order, or decision of a workers'
compensation administrative law judge. Any provision for arbitration
established pursuant to this section shall not be subject to
Sections 5270, 5270.5, 5271, 5272, 5273, 5275, and 5277.
(2) The use of an agreed list of providers of medical treatment
that may be the exclusive source of all medical treatment provided
under this division.
(3) The use of an agreed, limited list of qualified medical
evaluators and agreed medical evaluators that may be the exclusive
source of qualified medical evaluators and agreed medical evaluators
under this division.
(4) Joint labor management safety committees.
(5) A light-duty, modified job or return-to-work program.
(6) A vocational rehabilitation or retraining program utilizing an
agreed list of providers of rehabilitation services that may be the
exclusive source of providers of rehabilitation services under this
division.
(b) Nothing in this section shall allow a collective bargaining
agreement that diminishes the entitlement of an employee to
compensation payments for total or partial disability, temporary
disability, vocational rehabilitation, or medical treatment fully
paid by the employer as otherwise provided in this division; nor
shall any agreement authorized by this section deny to any employee
the right to representation by counsel at all stages of the
alternative dispute resolution process. The portion of any agreement
that violates this subdivision shall be declared null and void.
(c) Subdivision (a) shall apply only to the following:
(1) An employer developing or projecting an annual workers'
compensation insurance premium, in California, of two hundred fifty
thousand dollars ($250,000) or more, or any employer that paid an
annual workers' compensation insurance premium, in California, of two
hundred fifty thousand dollars ($250,000), in at least one of the
previous three years.
(2) Groups of employers engaged in a workers' compensation safety
group complying with Sections 11656.6 and 11656.7 of the Insurance
Code, and established pursuant to a joint labor management safety
committee or committees, which develops or projects annual workers'
compensation insurance premiums of two million dollars ($2,000,000)
or more.
(3) Employer or groups of employers that are self-insured in
compliance with Section 3700 that would have projected annual workers'
compensation costs that meet the requirements of paragraph (1) in
the case of employers, or paragraph (2) in the case of groups of
employers.
(4) In the aerospace and timber industry, this section shall apply
only to an affiliate of a national or international labor
organization that has one or more affiliate local unions that
negotiated an agreement or agreements pursuant to Section 3201.5
prior to January 1, 2003.
(d) Employers and labor representatives who meet the eligibility
requirements of this section shall be issued a letter by the
administrative director advising each employer and labor
representative that, based upon the review of all documents and
materials submitted as required by the administrative director, each
has met the eligibility requirements of this section.
(e) The premium rate for a policy of insurance issued pursuant to
this section shall not be subject to the requirements of Section
11732 or 11732.5 of the Insurance Code.
(f) No employer may establish or continue a program established
under this section until it has provided the administrative director
with all of the following:
(1) Upon its original application and whenever it is renegotiated
thereafter, a copy of the collective bargaining agreement and the
approximate number of employees who will be covered thereby.
(2) Upon its original application and annually thereafter, a valid
and active license where that license is required by law as a
condition of doing business in the state within the industries set
forth in subdivision (a).
(3) Upon its original application and annually thereafter, a
statement signed under penalty of perjury, that no action has been
taken by any administrative agency or court of the United States to
invalidate the collective bargaining agreement.
(4) The name, address, and telephone number of the contact person
of the employer.
(5) Upon its original application, a plan agreed to between an
employer and any affected union prior to the commencement of
collective bargaining, that establishes a framework for the
implementation of the system to be developed pursuant to paragraph
(1) of subdivision (a).
(6) Any other information that the administrative director deems
necessary to further the purposes of this section.
(g) No collective bargaining representative may establish or
continue to participate in a program established under this section
unless all of the following requirements are met:
(1) Upon its original application and annually thereafter, it has
provided to the administrative director a copy of its most recent
LM-2 or LM-3 filing with the United States Department of Labor, along
with a statement, signed under penalty of perjury, that the document
is a true and correct copy.
(2) It has provided to the administrative director the name,
address, and telephone number of the contact person or persons of the
collective bargaining representative or representatives.
(h) Commencing July 1, 2004, and annually thereafter, the Division
of Workers' Compensation shall report to the Director of Industrial
Relations the number of collective bargaining agreements received and
the number of employees covered by these agreements.
(i) By June 30, 2004, and annually thereafter, the Administrative
Director of the Division of Workers' Compensation shall prepare and
notify members of the Legislature that a report authorized by this
section is available upon request. The report based upon aggregate
data shall include the following:
(1) Person hours and payroll covered by agreements filed.
(2) The number of claims filed.
(3) The average cost per claim shall be reported by cost
components whenever practicable.
(4) The number of litigated claims, including the number of claims
submitted to mediation, the appeals board, or the court of appeals.
(5) The number of contested claims resolved prior to arbitration.
(6) The projected incurred costs and actual costs of claims.
(7) Safety history.
(8) The number of workers participating in vocational
rehabilitation.
(9) The number of workers participating in light-duty programs.
(10) Overall worker satisfaction.
The division shall have the authority to require those employers
and groups of employers listed in subdivision (c) to provide the data
listed above.
(j) The data obtained by the administrative director pursuant to
this section shall be confidential and not subject to public
disclosure under any law of this state. However, the Division of
Workers' Compensation shall create derivative works pursuant to
subdivisions (h) and (i) based on the collective bargaining
agreements and data. Those derivative works shall not be
confidential, but shall be public. On a monthly basis, the
administrative director shall make available an updated list of
employers and unions entering into collective bargaining agreements
containing provisions authorized by this section.
SEC. 6. Section 3501 of the Labor Code is amended to read:
3501. (a) A child under the age of 18 years, or a child of any
age found by any trier of fact, whether contractual, administrative,
regulatory, or judicial, to be physically or mentally incapacitated
from earning, shall be conclusively presumed to be wholly dependent
for support upon a deceased employee-parent with whom that child is
living at the time of injury resulting in death of the parent or for
whose maintenance the parent was legally liable at the time of injury
resulting in death of the parent, there being no surviving totally
dependent parent.
(b) A spouse to whom a deceased employee is married at the time of
death shall be conclusively presumed to be wholly dependent for
support upon the deceased employee if the surviving spouse earned
thirty thousand dollars ($30,000) or less in the twelve months
immediately preceding the death.
SEC. 7. Section 3701.8 is added to the Labor Code, to read:
3701.8. (a) As an alternative to each private self-insuring
employer securing its own incurred liabilities as provided in Section
3701, the director may provide by regulation for an alternative
security system whereby all private self-insureds designated for full
participation by the director shall collectively secure their
aggregate incurred liabilities through the Self-Insurers' Security
Fund. The regulations shall provide for the director to set a total
security requirement for these participating self-insured employers
based on a review of their annual reports and any other self-insurer
information as may be specified by the director. The Self-Insurers'
Security Fund shall propose to the director a combination of cash and
securities, surety bonds, irrevocable letters of credit, insurance,
or other financial instruments or guarantees satisfactory to the
director sufficient to meet the security requirement set by the
director. Upon approval by the director and posting by the
Self-Insurers' Security Fund on or before the date set by the
director, that combination shall be the composite deposit. The
noncash elements of the composite deposit may be one-year or
multiple-year instruments. If the Self-Insurers' Security Fund fails
to post the required composite deposit by the date set by the
director, then within 30 days after that date, each private
self-insuring employer shall secure its incurred liabilities in the
manner required by Section 3701. Self-insured employers not
designated for full participation by the director shall meet all
requirements as may be set by the director pursuant to subdivision
(g).
(b) In order to provide for the composite deposit approved by the
director, the Self-Insurers' Security Fund shall assess, in a manner
approved by the director, each fully participating private
self-insuring employer a deposit assessment payable within 30 days of
assessment. The amount of the deposit assessment charged each fully
participating self-insured employer shall be set by the
Self-Insurers' Security Fund, based on its reasonable consideration
of all the following factors:
(1) The total amount needed to provide the composite deposit.
(2) The self-insuring employer's paid or incurred liabilities as
reflected in its annual report.
(3) The financial strength and creditworthiness of the
self-insured.
(4) Any other reasonable factors as may be authorized by
regulation.
(5) In order to make a composite deposit proposal to the director
and set the deposit assessment to be charged each fully participating
self-insured, the Self-Insurers' Security Fund shall have access to
the annual reports and other information submitted by all
self-insuring employers to the director, under terms and conditions
as may be set by the director, to preserve the confidentiality of the
self-insured's financial information.
(c) Upon payment of the deposit assessment and except as provided
herein, the self-insuring employer loses all right, title, and
interest in the deposit assessment. To the extent that in any one
year the deposit assessment paid by self-insurers is not exhausted in
the purchase of securities, surety bonds, irrevocable letters of
credit, insurance, or other financial instruments to post with the
director as part of the composite deposit, the surplus shall remain
posted with the director, and the principal and interest earned on
that surplus shall remain as part of the composite deposit in
subsequent years. In the event that in any one year the
Self-Insurers' Security Fund fails to post the required composite
deposit by the date set the by the director, and the director
requires each private self-insuring employer to secure its
incurred liabilities in the manner
required by Section 3701, then any deposit assessment paid in that
year shall be refunded to the self-insuring employer that paid the
deposit assessment.
(d) If any private self-insuring employer objects to the
calculation, posting, or any other aspect of its deposit assessment,
upon payment of the assessment in the time provided, the employer
shall have the right to appeal the assessment to the director, who
shall have exclusive jurisdiction over this dispute. If any private
self-insuring employer fails to pay the deposit assessment in the
time provided, the director shall order the self-insuring employer to
pay a penalty of not less than 10 percent of its deposit assessment,
and to post a separate security deposit in the manner provided by
Section 3701. The penalty shall be added to the composite deposit
held by the director. The director may also revoke the certificate
of consent to self-insure of any self-insuring employer who fails to
pay the deposit assessment in the time provided.
(e) Upon the posting by the Self-Insurers' Security Fund of the
composite deposit with the director, the deposit shall be held until
the director determines that a private self-insured employer has
failed to pay workers' compensation as required by this division, and
the director orders the Self-Insurers' Security Fund to commence
payment. Upon ordering the Self-Insurers' Security Fund to commence
payment, the director shall make available to the fund that portion
of the composite deposit necessary to pay the workers' compensation
benefits of the defaulting self-insuring employer. In the event
additional funds are needed in subsequent years to pay the workers'
compensation benefits of any self-insuring employer who defaulted in
earlier years, the director shall make available to the Self-Insurers'
Security Fund any portions of the composite deposit as may be needed
to pay those benefits. In making the deposit available to the
Self-Insurers' Security Fund, the director shall also allow any
amounts as may be reasonably necessary to pay for the administrative
and other activities of the fund.
(f) The cash portion of the composite deposit shall be segregated
from all other funds held by the director, and shall be invested by
the director for the sole benefit of the Self-Insurers' Security Fund
and the injured workers of private self-insured employers, and may
not be used for any other purpose by the state. Alternatively, the
director, in his discretion, may allow the Self-Insurers' Security
Fund to hold, invest, and draw upon the cash portion of the composite
deposit as prescribed by regulation.
(g) Notwithstanding any other provision of this section, the
director shall, by regulation, set minimum credit, financial, or
other conditions that a private self-insured must meet in order to be
a fully participating self-insurer in the alternative security
system. In the event any private self-insuring employer is unable to
meet the conditions set by the director, or upon application of the
Self-Insurers' Security Fund to exclude an employer for credit or
financial reasons, the director shall exclude the self-insuring
employer from full participation in the alternative security system.
In the event a self-insuring employer is excluded from full
participation, the nonfully participating private self-insuring
employer shall post a separate security deposit in the manner
provided by Section 3701 and pay a deposit assessment set by the
director. Alternatively, the director may order that the nonfully
participating private self-insuring employer post a separate security
deposit to secure a portion of its incurred liabilities and pay a
deposit assessment set by the director.
(h) An employer who self-insures through group self-insurance and
an employer whose certificate to self-insure has been revoked may
fully participate in the alternative security system if both the
director and the Self-Insurers' Security Fund approve the
participation of the self-insurer. If not approved for full
participation, or if an employer is issued a certificate to
self-insure after the composite deposit is posted, the employer shall
satisfy the requirements of subdivision (g) for nonfully
participating private self-insurers.
(i) At all times, a self-insured employer shall have secured its
incurred workers' compensation liabilities either in the manner
required by Section 3701 or through the alternative security system,
and there shall not be any lapse in the security.
SEC. 8. Section 3742 of the Labor Code is amended to read:
3742. (a) The Self-Insurers' Security Fund shall be established
as a Nonprofit Mutual Benefit Corporation pursuant to Part 3
(commencing with Section 7110) of Division 2 of Title 1 of the
Corporations Code and this article. If any provision of the
Nonprofit Mutual Benefit Corporation Law conflicts with any provision
of this article, the provisions of this article shall apply. Each
private self-insurer shall participate as a member in the fund as a
condition of maintaining its certificate of consent to self-insure.
(b) The fund shall be governed by a seven member board of
trustees. The director shall hold ex officio status, with full
powers equal to those of a trustee, except that the director shall
not have a vote. The director, or a delegate authorized in writing
to act as the director's representative on the board of trustees,
shall carry out exclusively the responsibilities set forth in
Division 1 (commencing with Section 50) through Division 4
(commencing with Section 3200) and shall not have the obligations of
a trustee under the Nonprofit Mutual Benefit Corporation Law. The
fund shall adopt bylaws to segregate the director from all matters
that may involve fund litigation against the department or fund
participation in legal proceedings before the director. Although not
voting, the director or a delegate authorized in writing to
represent the director, shall be counted toward a quorum of trustees.
The remaining six trustees shall be representatives of private
self-insurers. The self-insurer trustees shall be elected by the
members of the fund, each member having one vote. Three of the
trustees initially elected by the members shall serve two-year terms,
and three shall serve four-year terms. Thereafter, trustees shall
be elected to four-year terms, and shall serve until their successors
are elected and assume office pursuant to the bylaws of the fund.
(c) The fund shall establish bylaws as are necessary to effectuate
the purposes of this article and to carry out the responsibilities
of the fund, including, but not limited to, any obligations imposed
by the director pursuant to Section 3701.8. The fund may carry out
its responsibilities directly or by contract, and may purchase
services and insurance and borrow funds as it deems necessary for the
protection of the members and their employees. The fund may receive
confidential information concerning the financial condition of
self-insured employers whose liabilities to pay compensation may
devolve upon it and shall adopt bylaws to prevent dissemination of
that information.
(d) The director may also require fund members to subscribe to
financial instruments or guarantees to be posted with the director in
order to satisfy the security requirements set by the director
pursuant to Section 3701.8.
SEC. 9. Section 4453 of the Labor Code is amended to read:
4453. (a) In computing average annual earnings for the purposes
of temporary disability indemnity and permanent total disability
indemnity only, the average weekly earnings shall be taken at:
(1) Not less than one hundred twenty-six dollars ($126) nor more
than two hundred ninety-four dollars ($294), for injuries occurring
on or after January 1, 1983.
(2) Not less than one hundred sixty-eight dollars ($168) nor more
than three hundred thirty-six dollars ($336), for injuries occurring
on or after January 1, 1984.
(3) Not less than one hundred sixty-eight dollars ($168) for
permanent total disability, and, for temporary disability, not less
than the lesser of one hundred sixty-eight dollars ($168) or 1.5
times the employee's average weekly earnings from all employers, but
in no event less than one hundred forty-seven dollars ($147), nor
more than three hundred ninety-nine dollars ($399), for injuries
occurring on or after January 1, 1990.
(4) Not less than one hundred sixty-eight dollars ($168) for
permanent total disability, and for temporary disability, not less
than the lesser of one hundred eighty-nine dollars ($189) or 1.5
times the employee's average weekly earnings from all employers, nor
more than five hundred four dollars ($504), for injuries occurring on
or after January 1, 1991.
(5) Not less than one hundred sixty-eight dollars ($168) for
permanent total disability, and for temporary disability, not less
than the lesser of one hundred eighty-nine dollars ($189) or 1.5
times the employee's average weekly earnings from all employers, nor
more than six hundred nine dollars ($609), for injuries occurring on
or after July 1, 1994.
(6) Not less than one hundred sixty-eight dollars ($168) for
permanent total disability, and for temporary disability, not less
than the lesser of one hundred eighty-nine dollars ($189) or 1.5
times the employee's average weekly earnings from all employers, nor
more than six hundred seventy-two dollars ($672), for injuries
occurring on or after July 1, 1995.
(7) Not less than one hundred sixty-eight dollars ($168) for
permanent total disability, and for temporary disability, not less
than the lesser of one hundred eighty-nine dollars ($189) or 1.5
times the employee's average weekly earnings from all employers, nor
more than seven hundred thirty-five dollars ($735), for injuries
occurring on or after July 1, 1996.
(8) Not less than one hundred eighty-nine dollars ($189), nor more
than nine hundred three dollars ($903), for injuries occurring on or
after January 1, 2003.
(9) Not less than one hundred eighty-nine dollars ($189), nor more
than one thousand ninety-two dollars ($1,092), for injuries
occurring on or after January 1, 2004.
(10) Not less than one hundred eighty-nine dollars ($189), nor
more than one thousand two hundred sixty dollars ($1,260), for
injuries occurring on or after January 1, 2005. For injuries
occurring on or after January 1, 2006, average weekly earnings shall
be taken at not less than one hundred eighty-nine dollars ($189), nor
more than one thousand two hundred sixty dollars ($1,260) or 1.5
times the state average weekly wage, whichever is greater.
Commencing on January 1, 2007, and each January 1 thereafter, the
limits specified in this paragraph shall be increased by an amount
equal to the percentage increase in the state average weekly wage as
compared to the prior year. For purposes of this paragraph, "state
average weekly wage" means the average weekly wage paid by employers
to employees covered by unemployment insurance as reported by the
United States Department of Labor for California for the 12 months
ending March 31 of the calendar year preceding the year in which the
injury occurred.
(b) In computing average annual earnings for purposes of permanent
partial disability indemnity, except as provided in Section 4659,
the average weekly earnings shall be taken at:
(1) Not less than seventy-five dollars ($75), nor more than one
hundred ninety-five dollars ($195), for injuries occurring on or
after January 1, 1983.
(2) Not less than one hundred five dollars ($105), nor more than
two hundred ten dollars ($210), for injuries occurring on or after
January 1, 1984.
(3) When the final adjusted permanent disability rating of the
injured employee is 15 percent or greater, but not more than 24.75
percent: (A) not less than one hundred five dollars ($105), nor more
than two hundred twenty-two dollars ($222), for injuries occurring
on or after July 1, 1994; (B) not less than one hundred five dollars
($105), nor more than two hundred thirty-one dollars ($231), for
injuries occurring on or after July 1, 1995; (C) not less than one
hundred five dollars ($105), nor more than two hundred forty dollars
($240), for injuries occurring on or after July 1, 1996.
(4) When the final adjusted permanent disability rating of the
injured employee is 25 percent or greater, not less than one hundred
five dollars ($105), nor more than two hundred twenty-two dollars
($222), for injuries occurring on or after January 1, 1991.
(5) When the final adjusted permanent disability rating of the
injured employee is 25 percent or greater but not more than 69.75
percent: (A) not less than one hundred five dollars ($105), nor more
than two hundred thirty-seven dollars ($237), for injuries occurring
on or after July 1, 1994; (B) not less than one hundred five dollars
($105), nor more than two hundred forty-six dollars ($246), for
injuries occurring on or after July 1, 1995; and (C) not less than
one hundred five dollars ($105), nor more than two hundred fifty-five
dollars ($255), for injuries occurring on or after July 1, 1996.
(6) When the final adjusted permanent disability rating of the
injured employee is less than 70 percent: (A) not less than one
hundred fifty dollars ($150), nor more than two hundred seventy-seven
dollars and fifty cents ($277.50), for injuries occurring on or
after January 1, 2003; (B) not less than one hundred fifty-seven
dollars and fifty cents ($157.50), nor more than three hundred
dollars ($300), for injuries occurring on or after January 1, 2004;
(C) not less than one hundred fifty-seven dollars and fifty cents
($157.50), nor more than three hundred thirty dollars ($330), for
injuries occurring on or after January 1, 2005; and (D) not less than
one hundred ninety-five dollars ($195), nor more than three hundred
forty-five dollars ($345), for injuries occurring on or after January
1, 2006.
(7) When the final adjusted permanent disability rating of the
injured employee is 70 percent or greater, but less than 100 percent:
(A) not less than one hundred five dollars ($105), nor more than two
hundred fifty-two dollars ($252), for injuries occurring on or after
July 1, 1994; (B) not less than one hundred five dollars ($105), nor
more than two hundred ninety-seven dollars ($297), for injuries
occurring on or after July 1, 1995; (C) not less than one hundred
five dollars ($105), nor more than three hundred forty-five dollars
($345), for injuries occurring on or after July 1, 1996; (D) not less
than one hundred fifty dollars ($150), nor more than three hundred
forty-five dollars ($345), for injuries occurring on or after January
1, 2003; (E) not less than one hundred fifty-seven dollars and fifty
cents ($157.50), nor more than three hundred seventy-five dollars
($375), for injuries occurring on or after January 1, 2004; (F) not
less than one hundred fifty-seven dollars and fifty cents ($157.50),
nor more than four hundred five dollars ($405), for injuries
occurring on or after January 1, 2005; and (G) not less than one
hundred ninety-five dollars ($195), nor more than four hundred five
dollars ($405), for injuries occurring on or after January 1, 2006.
(c) Between the limits specified in subdivisions (a) and (b), the
average weekly earnings, except as provided in Sections 4456 to 4459,
shall be arrived at as follows:
(1) Where the employment is for 30 or more hours a week and for
five or more working days a week, the average weekly earnings shall
be the number of working days a week times the daily earnings at the
time of the injury.
(2) Where the employee is working for two or more employers at or
about the time of the injury, the average weekly earnings shall be
taken as the aggregate of these earnings from all employments
computed in terms of one week; but the earnings from employments
other than the employment in which the injury occurred shall not be
taken at a higher rate than the hourly rate paid at the time of the
injury.
(3) If the earnings are at an irregular rate, such as piecework,
or on a commission basis, or are specified to be by week, month, or
other period, then the average weekly earnings mentioned in
subdivision (a) shall be taken as the actual weekly earnings averaged
for this period of time, not exceeding one year, as may conveniently
be taken to determine an average weekly rate of pay.
(4) Where the employment is for less than 30 hours per week, or
where for any reason the foregoing methods of arriving at the average
weekly earnings cannot reasonably and fairly be applied, the average
weekly earnings shall be taken at 100 percent of the sum which
reasonably represents the average weekly earning capacity of the
injured employee at the time of his or her injury, due consideration
being given to his or her actual earnings from all sources and
employments.
(d) Every computation made pursuant to this section beginning
January 1, 1990, shall be made only with reference to temporary
disability or the permanent disability resulting from an original
injury sustained after January 1, 1990. However, all rights existing
under this section on January 1, 1990, shall be continued in force.
Except as provided in Section 4661.5, disability indemnity benefits
shall be calculated according to the limits in this section in effect
on the date of injury and shall remain in effect for the duration of
any disability resulting from the injury.
SEC. 10. Section 4600.5 of the Labor Code is amended to read:
4600.5. (a) Any health care service plan licensed pursuant to the
Knox-Keene Health Care Service Plan Act, a disability insurer
licensed by the Department of Insurance, or any entity, including,
but not limited to, workers' compensation insurers and third-party
administrators authorized by the administrative director under
subdivision (e), may make written application to the administrative
director to become certified as a health care organization to provide
health care to injured employees for injuries and diseases
compensable under this article.
(b) Each application for certification shall be accompanied by a
reasonable fee prescribed by the administrative director, sufficient
to cover the actual cost of processing the application. A
certificate is valid for the period that the director may prescribe
unless sooner revoked or suspended.
(c) If the health care organization is a health care service plan
licensed pursuant to the Knox-Keene Health Care Service Plan Act, and
has provided the Managed Care Unit of the Division of Workers'
Compensation with the necessary documentation to comply with this
subdivision, that organization shall be deemed to be a health care
organization able to provide health care pursuant to Section 4600.3,
without further application duplicating the documentation already
filed with the Department of Managed Health Care. These plans shall
be required to remain in good standing with the Department of Managed
Health Care, and shall meet the following additional requirements:
(1) Proposes to provide all medical and health care services that
may be required by this article.
(2) Provides a program involving cooperative efforts by the
employees, the employer, and the health plan to promote workplace
health and safety, consultative and other services, and early return
to work for injured employees.
(3) Proposes a timely and accurate method to meet the requirements
set forth by the administrative director for all carriers of workers'
compensation coverage to report necessary information regarding
medical and health care service cost and utilization, rates of return
to work, average time in medical treatment, and other measures as
determined by the administrative director to enable the director to
determine the effectiveness of the plan.
(4) Agrees to provide the administrative director with
information, reports, and records prepared and submitted to the
Department of Managed Health Care in compliance with the Knox-Keene
Health Care Service Plan Act, relating to financial solvency,
provider accessibility, peer review, utilization review, and quality
assurance, upon request, if the administrative director determines
the information is necessary to verify that the plan is providing
medical treatment to injured employees in compliance with the
requirements of this code.
Disclosure of peer review proceedings and records to the
administrative director shall not alter the status of the proceedings
or records as privileged and confidential communications pursuant to
Sections 1370 and 1370.1 of the Health and Safety Code.
(5) Demonstrates the capability to provide occupational medicine
and related disciplines.
(6) Complies with any other requirement the administrative
director determines is necessary to provide medical services to
injured employees consistent with the intent of this article,
including, but not limited to, a written patient grievance policy.
(d) If the health care organization is a disability insurer
licensed by the Department of Insurance, and is in compliance with
subdivision (d) of Sections 10133 and 10133.5 of the Insurance Code,
the administrative director shall certify the organization to provide
health care pursuant to Section 4600.3 if the director finds that
the plan is in good standing with the Department of Insurance and
meets the following additional requirements:
(1) Proposes to provide all medical and health care services that
may be required by this article.
(2) Provides a program involving cooperative efforts by the
employees, the employer, and the health plan to promote workplace
health and safety, consultative and other services, and early return
to work for injured employees.
(3) Proposes a timely and accurate method to meet the requirements
set forth by the administrative director for all carriers of workers'
compensation coverage to report necessary information regarding
medical and health care service cost and utilization, rates of return
to work, average time in medical treatment, and other measures as
determined by the administrative director to enable the director to
determine the effectiveness of the plan.
(4) Agrees to provide the administrative director with
information, reports, and records prepared and submitted to the
Department of Insurance in compliance with the Insurance Code
relating to financial solvency, provider accessibility, peer review,
utilization review, and quality assurance, upon request, if the
administrative director determines the information is necessary to
verify that the plan is providing medical treatment to injured
employees consistent with the intent of this article.
Disclosure of peer review proceedings and records to the
administrative director shall not alter the status of the proceedings
or records as privileged and confidential communications pursuant to
subdivision (d) of Section 10133 of the Insurance Code.
(5) Demonstrates the capability to provide occupational medicine
and related disciplines.
(6) Complies with any other requirement the administrative
director determines is necessary to provide medical services to
injured employees consistent with the intent of this article,
including, but not limited to, a written patient grievance policy.
(e) If the health care organization is a workers' compensation
insurer, third-party administrator, or any other entity that the
administrative director determines meets the requirements of Section
4600.6, the administrative director shall certify the organization to
provide health care pursuant to Section 4600.3 if the director finds
that it meets the following additional requirements:
(1) Proposes to provide all medical and health care services that
may be required by this article.
(2) Provides a program involving cooperative efforts by the
employees, the employer, and the health plan to promote workplace
health and safety, consultative and other services, and early return
to work for injured employees.
(3) Proposes a timely and accurate method to meet the requirements
set forth by the administrative director for all carriers of workers'
compensation coverage to report necessary information regarding
medical and health care service cost and utilization, rates of return
to work, average time in medical treatment, and other measures as
determined by the administrative director to enable the director to
determine the effectiveness of the plan.
(4) Agrees to provide the administrative director with
information, reports, and records relating to provider accessibility,
peer review, utilization review, quality assurance, advertising,
disclosure, medical and financial audits, and grievance systems, upon
request, if the administrative director determines the information
is necessary to verify that the plan is providing medical treatment
to injured employees consistent with the intent of this article.
Disclosure of peer review proceedings and records to the
administrative director shall not alter the status of the proceedings
or records as privileged and confidential communications pursuant to
subdivision (d) of Section 10133 of the Insurance Code.
(5) Demonstrates the capability to provide occupational medicine
and related disciplines.
(6) Complies with any other requirement the administrative
director determines is necessary to provide medical services to
injured employees consistent with the intent of this article,
including, but not limited to, a written patient grievance policy.
(7) Complies with the following requirements:
(A) An organization certified by the administrative director under
this subdivision may not provide or undertake to arrange for the
provision of health care to employees, or to pay for or to reimburse
any part of the cost of that health care in return for a prepaid or
periodic charge paid by or on behalf of those employees.
(B) Every organization certified under this subdivision shall
operate on a fee-for-service basis. As used in this section, fee for
service refers to the situation where the amount of reimbursement
paid by the employer to the organization or providers of health care
is determined by the amount and type of health care rendered by the
organization or provider of health care.
(C) An organization certified under this subdivision is prohibited
from assuming risk.
(f) (1) A workers' compensation health care provider organization
authorized by the Department of Corporations on December 31, 1997,
shall be eligible for certification as a health care organization
under subdivision (e).
(2) An entity that had, on December 31, 1997, submitted an
application with the Commissioner of Corporations under Part 3.2
(commencing with Section 5150) shall be considered an applicant for
certification under subdivision (e) and shall be entitled to priority
in consideration of its application. The Commissioner of
Corporations shall provide complete files for all pending
applications to the administrative director on or before January 31,
1998.
(g) The provisions of this section shall not affect the
confidentiality or admission in evidence of a claimant's medical
treatment records.
(h) Charges for services arranged for or provided by health care
service plans certified by this section and that are paid on a
per-enrollee-periodic-charge basis shall not be subject to the
schedules adopted by the administrative director pursuant to Section
5307.1.
(i) Nothing in this section shall be construed to expand or
constrict any requirements imposed by law on a health care service
plan or insurer when operating as other than a health care
organization pursuant to this section.
(j) In consultation with interested parties, including the
Department of Corporations and the Department of Insurance, the
administrative director shall adopt rules necessary to carry out this
section.
(k) The administrative director shall refuse to certify or may
revoke or suspend the certification of any health care organization
under this section if the director finds that:
(1) The plan for providing medical treatment fails to meet the
requirements of this section.
(2) A health care service plan licensed by the Department of
Managed Health Care, a workers' compensation health care provider
organization authorized by the Department of Corporations, or a
carrier licensed by the Department of Insurance is not in good
standing with its licensing agency.
(3) Services under the plan are not being provided in accordance
with the terms of a certified plan.
(l) (1) When an injured employee requests chiropractic treatment
for work-related injuries, the health care organization shall provide
the injured worker with access to the services of a chiropractor
pursuant to guidelines for chiropractic care established by paragraph
(2). Within five working days of the employee's request to see a
chiropractor, the health care organization and any person or entity
who directs the kind or manner of health care services for the plan
shall refer an injured employee to an affiliated chiropractor for
work-related injuries that are within the guidelines for chiropractic
care established by paragraph (2). Chiropractic care rendered in
accordance with guidelines for chiropractic care established pursuant
to paragraph (2) shall be provided by duly licensed chiropractors
affiliated with the plan.
(2) The health care organization shall establish guidelines for
chiropractic care in consultation with affiliated chiropractors who
are participants in the health care organization's utilization review
process for chiropractic care, which may include qualified medical
evaluators knowledgeable in the treatment of chiropractic conditions.
The guidelines for chiropractic care shall, at a minimum,
explicitly require the referral of any injured employee who so
requests to an affiliated chiropractor for the evaluation or
treatment, or both, of neuromusculoskeletal conditions.
(3) Whenever a dispute concerning the appropriateness or necessity
of chiropractic care for work-related injuries arises, the dispute
shall be resolved by the health care organization's utilization
review process for chiropractic care in accordance with the health
care organization's guidelines for chiropractic care established by
paragraph (2).
Chiropractic utilization review for work-related injuries shall be
conducted in accordance with the health care organization's approved
quality assurance standards and utilization review process for
chiropractic care. Chiropractors affiliated with the plan shall have
access to the health care organization's provider appeals process
and, in the case of chiropractic care for work-related injuries, the
review shall include review by a chiropractor affiliated with the
health care organization, as determined by the health care
organization.
(4) The health care organization shall inform employees of the
procedures for processing and resolving grievances, including those
related to chiropractic care, including the location and telephone
number where grievances may be submitted.
(5) All guidelines for chiropractic care and utilization review
shall be consistent with the standards of this code that require care
to cure or relieve the effects of the industrial injury.
(m) Individually identifiable medical information on patients
submitted to the division shall not be subject to the California
Public Records Act (Chapter 3.5 (commencing with Section 6250) of
Division 7 of Title 1 of the Government Code).
(n) (1) When an injured employee requests acupuncture treatment
for work-related injuries, the health care organization shall provide
the injured worker with access to the services of an acupuncturist
pursuant to guidelines for acupuncture care established by paragraph
(2). Within five working days of the employee's request to see an
acupuncturist, the health care organization and any person or entity
who directs the kind or manner of health care services for the plan
shall refer an injured employee to an affiliated acupuncturist for
work-related injuries that are within the guidelines for acupuncture
care established by paragraph (2). Acupuncture care rendered in
accordance with guidelines for acupuncture care established pursuant
to paragraph (2) shall be provided by duly licensed acupuncturists
affiliated with the plan.
(2) The health care organization shall establish guidelines for
acupuncture care in consultation with affiliated acupuncturists who
are participants in the health care organization's utilization review
process for acupuncture care, which may include qualified medical
evaluators. The guidelines for acupuncture care shall, at a minimum,
explicitly require the referral of any injured employee who so
requests to an affiliated acupuncturist for the evaluation or
treatment, or both, of neuromusculoskeletal conditions.
(3) Whenever a dispute concerning the appropriateness or necessity
of acupuncture care for work-related injuries arises, the dispute
shall be resolved by the health care organization's utilization
review process for acupuncture care in accordance with the health
care organization's guidelines for acupuncture care established by
paragraph (2).
Acupuncture utilization review for work-related injuries shall be
conducted in accordance with the health care organization's approved
quality assurance standards and utilization review process for
acupuncture care. Acupuncturists affiliated with the plan shall have
access to the health care organization's provider appeals process
and, in the case of acupuncture care for work-related injuries, the
review shall include review by an acupuncturist affiliated with the
health care organization, as determined by the health care
organization.
(4) The health care organization shall inform employees of the
procedures for processing and resolving grievances, including those
related to acupuncture care, including the location and telephone
number where grievances may be submitted.
(5) All guidelines for acupuncture care and utilization review
shall be consistent with the standards of this code that require care
to cure or relieve the effects of the industrial injury.
SEC. 11. Section 4614 of the Labor Code is amended to read:
4614. (a) (1) Notwithstanding Section 5307.1, where the employee'
s individual or organizational provider of health care services
rendered under this division and paid on a fee-for-service basis is
also the provider of health care services under contract with the
employee's health benefit program, and the service or treatment
provided is included within the range of benefits of the employee's
health benefit program, and paid on a fee-for-service basis, the
amount of payment for services provided under this division, for a
work-related occurrence or illness, shall be no more than the amount
that would have been paid for the same services under the health
benefit plan, for a non-work-related occurrence or illness.
(2) A health care service plan that arranges for health care
services to be rendered to an employee under this division under a
contract, and which is also the employee's organizational provider
for nonoccupational injuries and illnesses, with the exception of a
nonprofit health care service plan that exclusively contracts with a
medical group to provide or arrange for medical services to its
enrollees in a designated geographic area, shall be paid by the
employer for services rendered under this division only on a
capitated basis.
(b) (1) Where the employee's individual or organizational provider
of health care services rendered under this division who is not
providing services under a contract is not the provider of health
care services under contract with the employee's health benefit
program or where the services rendered under this division are not
within the benefits provided under the employer-sponsored health
benefit program, the provider shall receive payment that is no more
than the average of the payment that would have been paid by five of
the largest preferred provider organizations by geographic region.
Physicians, as defined in Section 3209.3, shall be reimbursed at the
same averaged rates, regardless of licensure, for the delivery of
services under the same procedure code. This subdivision shall not
apply to a health care service plan that provides its services on a
capitated basis.
(2) The administrative director shall identify the regions and the
five largest carriers in each region. The carriers shall provide
the necessary information to the administrative director in the form
and manner requested by the administrative director. The
administrative director shall make this information available to the
affected providers on an annual basis.
(c) Nothing in this section shall prohibit an individual or
organizational health care provider from being paid fees different
from those set forth in the official medical fee schedule by an
employer, insurance carrier, third-party administrator on behalf of
employers, or preferred provider organization representing an
employer or insurance carrier provided that the administrative
director has determined that the alternative negotiated rates between
the organizational or individual provider and a payer, a third-party
administrator on behalf of employers, or a preferred provider
organization will produce greater savings in the aggregate than if
each item on billings were to be charged at the scheduled rate.
(d) For the purposes of this section, "organizational provider"
means an entity that arranges for health care services to be rendered
directly by individual caregivers. An organizational provider may
be a health care service plan, disability insurer, health care
organization, preferred provider organization, or workers'
compensation insurer arranging for care through a managed care
network or on a fee-for-service basis. An individual provider is
either an individual or institution that provides care directly to
the injured worker.
SEC. 12. Section 4702 of the Labor Code, as amended by Chapter 6
of the Statutes of 2002, is amended to read:
4702. (a) Except as otherwise provided in this section and
Sections 4553, 4554, 4557, and 4558, the death benefit in cases of
total dependency shall be as follows:
(1) In the case of two total dependents and regardless of the
number of partial dependents, for injuries occurring before January
1, 1991, ninety-five thousand dollars ($95,000), for injuries
occurring on or after January 1, 1991, one hundred fifteen thousand
dollars ($115,000), for injuries occurring on or after July 1, 1994,
one hundred thirty-five thousand dollars ($135,000), for injuries
occurring on or after July 1, 1996, one hundred forty-five thousand
dollars ($145,000), and for injuries occurring on or after January 1,
2006, two hundred ninety thousand dollars ($290,000).
(2) In the case of one total dependent and one or more partial
dependents, for injuries occurring before January 1, 1991, seventy
thousand dollars ($70,000), for injuries occurring on or after
January 1, 1991, ninety-five thousand dollars ($95,000), for injuries
occurring on or after July 1, 1994, one hundred fifteen thousand
dollars ($115,000), for injuries occurring on or after July 1, 1996,
one hundred twenty-five thousand dollars ($125,000), and for injuries
occurring on or after January 1, 2006, two hundred fifty thousand
dollars ($250,000), plus four times the amount annually devoted to
the support of the partial dependents, but not more than the
following: for injuries occurring before January 1, 1991, a total of
ninety-five thousand dollars ($95,000), for injuries occurring on or
after January 1, 1991, one hundred fifteen thousand dollars
($115,000), for injuries occurring on or after July 1, 1994, one
hundred twenty-five thousand dollars ($125,000), for injuries
occurring on or after July 1, 1996, one hundred forty-five thousand
dollars ($145,000), and for injuries occurring on or after January 1,
2006, two hundred ninety thousand dollars ($290,000).
(3) In the case of one total dependent and no partial dependents,
for injuries occurring before January 1, 1991, seventy thousand
dollars ($70,000), for injuries occurring on or after January 1,
1991, ninety-five thousand dollars ($95,000), for injuries occurring
on or after July 1, 1994, one hundred fifteen thousand dollars
($115,000), for injuries occurring on or after July 1, 1996, one
hundred twenty-five thousand dollars ($125,000), and for injuries
occurring on or after January 1, 2006, two hundred fifty thousand
dollars ($250,000).
(4) (A) In the case of no total dependents and one or more partial
dependents, for injuries occurring before January 1, 1991, four
times the amount annually devoted to the support of the partial
dependents, but not more than seventy thousand dollars ($70,000), for
injuries occurring on or after January 1, 1991, a total of
ninety-five thousand dollars ($95,000), for injuries occurring on or
after July 1, 1994, one hundred fifteen thousand dollars ($115,000),
and for injuries occurring on or after July 1, 1996, but before
January 1, 2006, one hundred twenty-five thousand dollars ($125,000).
(B) In the case of no total dependents and one or more partial
dependents, eight times the amount annually devoted to the support of
the partial dependents, for injuries occurring on or after January
1, 2006, but not more than two hundred fifty thousand dollars
($250,000).
(5) In the case of three or more total dependents and regardless
of the number of partial dependents, one hundred fifty thousand
dollars ($150,000), for injuries occurring on or after July 1, 1994,
one hundred sixty thousand dollars ($160,000), for injuries occurring
on or after July 1, 1996, and three hundred twenty thousand dollars
($320,000), for injuries occurring on or after January 1, 2006.
(6) For injuries occurring on or after January 1, 2004, in the
case of no total dependents and no partial dependents, two hundred
fifty thousand dollars ($250,000) to the estate of the deceased
employee.
(b) The death benefit in all cases shall be paid in installments
in the same manner and amounts as temporary total disability
indemnity would have to be made to the employee, unless the appeals
board otherwise orders. However, no payment shall be made at a
weekly rate of less than two hundred twenty-four dollars ($224).
(c) Disability indemnity shall not be deducted from the death
benefit and shall be paid in addition to the death benefit when the
injury resulting in death occurs after September 30, 1949.
(d) All rights under this section existing prior to January 1,
1990, shall be continued in force.
SEC. 13. Section 5307.21 is added to the Labor Code, to read:
5307.21. (a) The administrative director shall have the sole
authority to develop an outpatient surgery facility fee schedule for
services not performed under contract, provided that the schedule
meets all of the following requirements:
(1) The schedule shall include all facility charges for outpatient
surgeries performed in any facility authorized by law to perform the
surgeries. The schedule may not include the fee of any physician
and surgeon providing services in connection with the surgery.
(2) The schedule shall promote payment predictability, minimize
administrative costs, and ensure access to outpatient surgery
services by injured workers.
(3) The schedule shall be sufficient to cover the costs of each
surgical procedure, as well as access to quality care.
(4) The schedule shall include specific provisions for review and
revision of related fees no less frequently than biennially.
(5) The schedule shall be adopted after public hearings pursuant
to Section 5307.3 and shall be included within the official medical
fee schedule.
(b) The process used by the administrative director to develop an
outpatient surgery fee schedule shall contain the following elements:
(1) A formal analysis of one year of published data collected
pursuant to Section 128737 of the Health and Safety Code, with the
assistance of an independent consultant with demonstrated expertise
in outpatient surgery service.
(2) Any published data collected from providers of outpatient
surgery services.
(3) Payment data including, but not limited to, type of payer and
amount charged.
(4) Cost data including, but not limited to, actual expenses for
labor, supplies, equipment, implants, anesthesia, overhead, and
administration.
(5) Outcome data including, but not limited to, expected level of
rehabilitation, expected coverage timeframe, and incidence of
infection.
(6) Access data including, but not limited to, date of injury,
date of surgery recommendation, and date of procedure.
(7) Other data that is mutually agreed to by the Office of
Statewide Health Planning and Development and the administrative
director. The administrative director shall consult with the Office
of Statewide Health Planning and Development to ensure that the data
collected is comprehensive and relevant to the development of a fee
schedule.
(c) The outpatient surgery facility fee schedule shall reflect
input from workers' compensation insurance carriers, businesses,
organized labor, providers of outpatient surgical services, and
patients receiving outpatient surgical services.
(d) At least 90 days prior to commencing the public hearings
related to an outpatient surgery fee schedule as prescribed by
Section 5307.3, the administrative director shall provide the
Assembly Committee on Insurance and the Senate Committee on Labor and
Industrial Relations a comprehensive report on the data analysis
required by this section and the administrative director's
recommendations for an outpatient surgery fee schedule.
SEC. 14. Section 5502 of the Labor Code is amended to read:
5502. (a) Except as provided in subdivisions (b) and (d), the
hearing shall be held not less than 10 days, and not more than 60
days, after the date a declaration of readiness to proceed, on a form
prescribed by the court administrator, is filed. If a claim form
has been filed for an injury occurring on or after January 1, 1990,
and before January 1, 1994, an application for adjudication shall
accompany the declaration of readiness to proceed.
(b) The court administrator shall establish a priority calendar
for issues requiring an expedited hearing and decision. A hearing
shall be held and a determination as to the rights of the parties
shall be made and filed within 30 days after the declaration of
readiness to proceed is filed if the issues in dispute are any of the
following:
(1) The employee's entitlement to medical treatment pursuant to
Section 4600.
(2) The employee's entitlement to, or the amount of, temporary
disability indemnity payments.
(3) The employee's entitlement to vocational rehabilitation
services, or the termination of an employer's liability to provide
these services to an employee.
(4) The employee's entitlement to compensation from one or more
responsible employers when two or more employers dispute liability as
among themselves.
(5) Any other issues requiring an expedited hearing and
determination as prescribed in rules and regulations of the
administrative director.
(c) The court administrator shall establish a priority conference
calendar for cases in which the employee is represented by an
attorney and the issues in dispute are employment or injury arising
out of employment or in the course of employment. The conference
shall be conducted by a workers' compensation administrative law
judge within 30 days after the declaration of readiness to proceed.
If the dispute cannot be resolved at the conference, a trial shall be
set as expeditiously as possible, unless good cause is shown why
discovery is not complete, in which case status conferences shall be
held at regular intervals. The case shall be set for trial when
discovery is complete, or when the workers' compensation
administrative law judge determines that the parties have had
sufficient time in which to complete reasonable discovery. A
determination as to the rights of the parties shall be made and filed
within 30 days after the trial.
(d) The court administrator shall report quarterly to the Governor
and to the Legislature concerning the frequency and types of issues
which are not heard and decided within the period prescribed in this
section and the reasons therefor.
(e) (1) In all cases, a mandatory settlement conference shall be
conducted not less than 10 days, and not more than 30 days, after the
filing of a declaration of readiness to proceed. If the dispute is
not resolved, the regular hearing shall be held within 75 days after
the declaration of readiness to proceed is filed.
(2) The settlement conference shall be conducted by a workers'
compensation administrative law judge or by a referee who is eligible
to be a workers' compensation administrative law judge or eligible
to be an arbitrator under Section 5270.5. At the mandatory
settlement conference, the referee or workers' compensation
administrative law judge shall have the authority to resolve the
dispute, including the authority to approve a compromise and release
or issue a stipulated finding and award, and if the dispute cannot be
resolved, to frame the issues and stipulations for trial. The
appeals board shall adopt any regulations needed to implement this
subdivision. The presiding workers' compensation administrative law
judge shall supervise settlement conference referees in the
performance of their judicial functions under this subdivision.
(3) If the claim is not resolved at the mandatory settlement
conference, the parties shall file a pretrial conference statement
noting the specific issues in dispute, each party's proposed
permanent disability rating, and listing the exhibits, and disclosing
witnesses. Discovery shall close on the date of the mandatory
settlement conference. Evidence not disclosed or obtained thereafter
shall not be admissible unless the proponent of the evidence can
demonstrate that it was not available or could not have been
discovered by the exercise of due diligence prior to the settlement
conference.
(f) In cases involving the Director of the Department of
Industrial Relations in his or her capacity as administrator of the
Uninsured Employers Fund, this section shall not apply unless proof
of service, as specified in paragraph (1) of subdivision (d) of
Section 3716 has been filed with the appeals board and provided to
the Director of Industrial Relations, valid jurisdiction has been
established over the employer, and the fund has been joined.
(g) Except as provided in subdivision (a) and in Section 4065, the
provisions of this section shall apply irrespective of the date of
injury.
SEC. 15. Section 6354.7 is added to the Labor Code, to read:
6354.7. (a) The Workers' Occupational Safety and Health Education
Fund is hereby created as a special account in the State Treasury.
Proceeds of the fund may be expended, upon appropriation by the
Legislature, by the Commission on Health and Safety and Workers'
Compensation for the purpose of establishing and maintaining a worker
occupational safety and health training and education program and an
insurance loss control services coordinator. The director shall
levy and collect fees to fund these purposes from insurers subject to
Section 6354.5. However, the fee assessed against any insurer shall
not exceed the greater of one hundred dollars ($100) or 0.0286
percent of paid workers' compensation indemnity amounts for claims as
reported for the previous calendar year to the designated rating
organization for the analysis required under subdivisions (b) and (c)
of Section 11759.1 of the Insurance Code. All fees shall be
deposited in the fund.
(b) The commission shall establish and maintain a worker safety
and health training and education program. The purpose of the worker
occupational safety and health training and education program shall
be to promote awareness of the need for prevention education
programs, to develop and provide injury and illness prevention
education programs for employees and their representatives, and to
deliver those awareness and training programs through a network of
providers throughout the state. The commission may conduct the
program directly or by means of contracts or interagency agreements.
(c) The commission shall establish an employer and worker advisory
board for the program. The advisory board shall guide the
development of curricula, teaching methods, and specific course
material about occupational safety and health, and shall assist in
providing links to the target audience and broadening the
partnerships with worker-based organizations, labor studies programs,
and others that are able to reach the target audience.
(d) The program shall include the development and provision of a
needed core curriculum addressing competencies for effective
participation in workplace injury and illness prevention programs and
on joint labor-management health and safety committees. The core
curriculum shall include an overview of the requirements related to
injury and illness prevention programs
and hazard communication.
(e) The program shall include the development and provision of
additional training programs for any or all of the following
categories:
(1) Industries on the high hazard list.
(2) Hazards that result in significant worker injuries, illnesses,
or compensation costs.
(3) Industries or trades in which workers are experiencing
numerous or significant injuries or illnesses.
(4) Occupational groups with special needs, such as those who do
not speak English as their first language, workers with limited
literacy, young workers, and other traditionally underserved
industries or groups of workers. Priority shall be given to training
workers who are able to train other workers and workers who have
significant health and safety responsibilities, such as those workers
serving on a health and safety committee or serving as designated
safety representatives.
(f) The program shall operate one or more libraries and
distribution systems of occupational safety and health training
material, which shall include, but not be limited to, all material
developed by the program pursuant to this section.
(g) The advisory board shall annually prepare a written report
evaluating the use and impact of programs developed.
(h) The payment of administrative costs incurred by the commission
in conducting the program shall be made from the Workers'
Occupational Safety and Health Education Fund.
SEC. 16. Section 86 of Chapter 6 of the Statutes of 2002 is
amended to read:
Sec. 86. It is the intent of the Legislature that all
reimbursement expended by the Administrative Director of the Division
of Workers' Compensation for the administration of the workers'
compensation Return-to-Work Program established in Section 139.48 of
the Labor Code shall be funded from the funds collected in the annual
premium tax, collected under Section 12201 of the Revenue and
Taxation Code, which is directly attributable to the compensation
benefit rates and amounts set forth in Chapter 6 of the Statutes of
2002.
SEC. 17. It is the intent of the Legislature that annual
appropriations to the Division of Workers' Compensation be sufficient
to enable the division to hire necessary staff and to obtain
adequate resources and technology to carry out and complete each of
its mandates under Divisions 1 (commencing with Section 50), 4
(commencing with Section 3200), and 4.5 (commencing with Section
6100) of the Labor Code in a timely manner and in a manner consistent
with the directives set forth in Section 4 of Article XIV of the
California Constitution.
SEC. 18. Sections 3, 12, and 16 of this act shall be effective
only if Chapter 6 of the Statutes of 2002 becomes operative.
SEC. 19. No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.