Today Could Be the Day : Closing in on a reform to help California

Sacramento has a big chance today to deliver on the promise to make California more competitive: It is close to passing an omnibus bill to overhaul the state’s costly, counterproductive and often-crazy workers’ compensation system.

It should be an easy call for Senate and Assembly members, who have been beseeched by their constituents to do something about the $12-billion workers’ comp system.

AB 110 and a package of related bills are designed to correct a system in which employers pay insurance premiums among the highest in the nation but injured workers receive benefits among the lowest. This workers’ comp proposal provides savings of at least $1.5 billion. Half of that would go to employers in the form of reduced insurance costs and half would be used to increase benefits, over three years, to injured workers.

Members of the Senate-Assembly conference committee are to be commended for their tenacity in two months of negotiations and in producing a credible, reasonably comprehensive bill. The bipartisan effort to contain costs for recession-battered California employers ought to help send a message that Sacramento is becoming more business-friendly.

Repeated failure to change the system--Times editorials alone advocated reform more than 50 times over the last two years--has come to symbolize gridlock in Sacramento.

The changes in the workers’ comp package include:

Higher benefits for injured workers. Injured workers, who now get $336 a week, could get $490 by July 1, 1996.

Limiting medical/legal evaluations. Now the average workers’ comp case requires evaluations by five different doctors at a cost of $1,000 each to employers. The reform would generally limit evaluations to two--one per side in disputed cases. The annual savings would run to many millions.

Vocational rehabilitation. The average case now costs about $20,000; the new limit would be $16,000.

Higher stress threshold. The job must be the “predominate” cause of stress. Currently workers qualify for benefits if only 10% of stress is job-related. This is a major source of the outrageous explosion in costs to honest employers.

Insurance costs. Premiums, paid by employers, would be reduced 7% next year. And the state minimum rate law, which virtually guarantees insurers a profit, would be repealed, opening the market to free competition by 1995.

Reforming the system will trigger a collective sigh of relief among employers that will echo up and down California. The scandal of workers’ comp has added immeasurably--and insanely--to the grief of doing business in recession-racked and red-tape-wrapped California. If the Legislature can get this deal done today, it will be able to take its monthlong recess on a high note of achievement.