Monday, April 25, 2011

California Woes for A WC Insurer and A Staffing Agency

There have been a couple of developments in the California Workers Comp marketplace that are leaving some employers scrambling. First, regulators have placed Majestic Insurance into conservatorship. Majestic wrote most of its business in California, but also wrote policies in New York, Arizona, New Jersey, Nevada, and some other states.

At the same time, it is reported that a large California temporary staffing agency is prepared to shut down in the wake of disputed multimillion dollar fine by California regulators. Mainstay was created and operated by an Indian tribe in California. Mainstay has been embroiled for years with California regulators over Workers Comp and Unemployment Compensation issues.

Wednesday, April 6, 2011

A WTF Moment in Illinois Workers Comp

Illinois state representative John Bradley has introduced a bill in the Illinois House to repeal the Illinois Workers Compensation Act. Bradley, a Democrat from Marion, Illinois, reportedly has characterized this as a response to the efforts by the business community to change the causation standard in Illinois Workers Compensation so that the workplace must be the primary cause of a covered injury or illness.

That's right--a Democrat in Illinois has introduced a bill to abolish the Workers Compensation Act. Now, it seems pretty clear that such a proposal will go nowhere, that is intended merely as some kind of protest, but even so...WTF, as they say on the internets.

Saturday, April 2, 2011

Illinois Governor Proposes His Version of WC Reform

Illinois Governor Pat Quinn (who is, if nothing else, the rara avis of politics, an honest man) has proposed his own version of Workers Compensation reform for Illinois. There are also several reform proposals still floating around the state legislature (including one bill backed by the Illinois Chamber of Commerce, of which I am a member.)

All of these proposals focus on the claims side of the equation, though. Quinn's version, like some others, would prevent injured workers from collecting Workers Comp if drugs or alcohol played a part. Quinn also proposes putting some limits on medical expenses, and upgrading the caliber of Workers Comp arbitrators by requiring them to be attorneys.

Business groups are less than satisfied, though, as they really want some greater changes, such as requiring that a worker be able to prove that the workplace was the primary cause of the injury, and making the medical fee schedule that was approved a few years ago actually adopt meaningful standards.

But all of these proposals ignore what I think is something important: insurance reform. For most employers, insurance is the only viable way to satisfy their Workers Compensation liabilities, and the insurance regulations in Illinois could be significantly improved to hold down the cost of Workers Compensation insurance.

Many small employers in Illinois are in the Assigned Risk Plan, for instance, only because they are small or new businesses. And the cost of the Assigned Risk Plan is often double what the cost of the same coverage would be in the so-called "voluntary" insurance market.

I've written to Governor Quinn, and Illinois legislators, about what could be done to reform Workers Compensation insurance costs in Illinois. So far, no one has bothered to even respond to me. And I don't think that's likely to happen, either, more's the pity.