California Workers Compensation Claims

California has the most workers’ compensation claims, a reflection of its having the largest labor force of any state. The California workers’ comp system is similar to other states, but does have its own peculiarities (as other states do).

In California, the workers’ comp adjuster must accept or deny the claim within 90 days of the employee filing the claim with the employer. If the claim is not denied within 90 days after it is reported, it cannot be denied later.

Medical Benefits

Just like all other states, California provides the injured employee with all necessary medical care to recover from the injury. The employer selects the medical provider. If the employee is happy with the medical provider, everything is fine. If the employee is unhappy with the employer-selected medical provide, the employee can change the medical provider to one of his/her own selection, 30 days after the injury. This tactic is sometimes called, “going to a plaintiff-friendly doctor.”

Another oddity of the California workers’ comp medical benefits statute is the employee can pre-select the treating physician prior to the injury. If the employee is planning the accident, or even if the employee is not planning the accident, the employee can notify the employer in writing of a personal physician who previously treated the employee. The employee then can be treated by his/her personal physician immediately after an accident and does not have to wait 30 days after the accident to change medical providers.

If the employer has established a medical provider network (MPN), approved by the Division of Workers’ Compensation (DWC), the employee cannot use a personal physician. The employee can still change physicians after 30 days, but only within the employer’s MPN and must remain in the MPN for the duration of the workers’ comp claim.

The MPN must include a mix of doctors expert in general areas of medicine and doctors who specialize in both common occupational injuries and work related illnesses. The doctors of the MPN must follow the medical treatment guidelines established by the DWC. If the employee disagrees with the MPN doctor, the MPN must be have a large enough selection of physicians for the employee to obtain a second, or even a third opinion. If the employee disagrees with all three MPN doctor’s opinions, the employee can request an independent medical review.

Indemnity Benefits

California indemnity benefits are divided into two types, temporary disability benefits, and permanent disability (PD) benefits. Temporary disability benefits are divided into two parts, temporary total disability benefits (TTD) and temporary partial disability benefits (TPD).

TTD is paid to the employee for time off work following the accident, after a three-day waiting period. There is no waiting period in California if the employee is immediately hospitalized. If the employee is off work more than fourteen days, the employee is paid retroactively for the first three days of the waiting period.

The amount of TTD benefit payable to the employee is calculated by multiplying the average weekly wage (AWW) by two-thirds. The AWW includes the gross paycheck amount plus the value of employer provided food and lodging. Any overtime compensation, bonuses, or commissions paid to the employee are included in the AWW. If the employee works a second job and is unable to work at the second job because of the injury on the employer’s job, the loss earnings from the second job are included in the AWW calculation. The maximum amount of TTD paid to an employee is $728.00 per week.

The TTD benefits payable to the employee end when the employee returns to work, or the employee reaches maximum medical improvement (MMI), or after 104 weeks. [With a date of injury prior to January 1, 2008, the 104 weeks ended two years from the date of the accident. After January 1, 2008, the employee can be paid TTD for any 104 weeks within five years of the date of injury.]

Temporary partial disability benefits are available for workers who can return to work part time before they reach MMI. TPD is paid as a prorated amount of the TTD benefit.

Return to Work

The California workers’ comp statutes encourage employers to bring injured employees back to work. The employers with 50 or more employees, with a return to work program offering injured employees regular or modified duty or alternative work, pay15% lower weekly permanent disability payments once a return to work offer is made. If the employer with 50 or more employees does not make a return to work offer, they pay 15% more in weekly permanent disability benefits. For more information on the California Return To Work requirements, please see: www.dir.ca.gov/dwc/rehab

Permanent Disability

When the injured employee reaches MMI (also known as P&S — permanent and stationary in California workers’ comp lingo), the treating doctor provides a disability rating if the employee has not recovered to 100% of the pre-injury status. California does not use the National Council on Compensation Insurance rating codes used in most states. California has its own rating code system the treating doctors use to determine a disability rating. If the treating doctor determines the employee had a preexisting condition, an apportionment of the rating is assigned to the employee.

Payment of the PD benefits begins when TTD benefits end. This is true even if the final percentage of disability is not agreed to by the workers’ comp adjuster. The PD payments continue until the case is resolved or the adjuster pays the reasonable amount of disability expected. The PD rate is the same as the TTD rate, except the PD rate is capped at $220 per week for disabilities rated under 70% and capped at $270 per week for disabilities rated at 70% and over.

If the employee or the workers’ comp adjuster does not agree with the doctor’s permanency rating, either can ask for a Qualified Medical Evaluator (QME). The QME is a doctor approved by the DWC to evaluate permanency ratings. When a QME is requested, the DWC provides the employee with a list of three QMEs approved for the employee’s area of the state.

If the employee is not represented by an attorney the employee can select any QME on the list. If the employee is represented, the workers’ comp adjuster and the employee’s attorney try to agree to the doctor selected for the rating who is then referred to as the Agreed Medical Evaluator (AME). If the workers’ comp adjuster and the employee’s attorney cannot agree on an AME, they each select their own QME to do an evaluation. The two QME reports are compared and negotiated (litigated if necessary) to determine the permanency impairment rating.

When a permanency rating is finally determined (it sometimes takes a long time in California), the claim can be resolved in two ways. The workers’ comp adjuster and the employee or employee’s attorney reach an agreement on the settlement amount. It is then submitted to the DWC where a workers’ comp judge reviews and approves it, if the WC judge agrees with the settlement reached.

Once the claim has DWC approval for settlement, a settlement agreement called a Compromise and Release (C&R) is drawn up. The C&R specifies a lump sum payment for the disability and for future medical care, releasing the workers’ comp insurer from any further obligations for the claim.

If the workers’ comp adjuster and employee/employee’s attorney still cannot agree on the resolution of the claim, the matter goes before a Division judge who reviews the claim and makes a ruling called a Findings and Award (F&A). The F&A specifies the amount to be paid for the PD and normally requires the insurer to pay for all future medical care related to the original injury.

Death Benefits

When an employee suffers a fatal injury on the job, reasonable burial expenses up to $5,000 are paid. Dependents are eligible for death benefits. The amount of death benefits depends on the TTD rate, the number of dependents, and the extent of their dependency. The maximum amount payable in death benefits is $160,000 when there are three or more dependents. The maximum death benefit can be exceeded if there continues to be dependent children after the maximum has been reached.

California no longer requires vocational rehabilitation services. For all injuries on January 1, 2004, and afterward, the employee can receive a nontransferable voucher worth up to $10,000 for training or skill enhancement to a state approved school. To obtain this voucher, the employee must have a permanent injury, does not return to work within 60 days of the end of TTD and the employer does not offer modified duty.

Author Robert Elliott, executive vice president, Amaxx Risks Solutions, Inc. has worked successfully for 20 years with many industries to reduce Workers’ Compensation costs, including airlines, healthcare, manufacturing, printing/publishing, pharmaceuticals, retail, hospitality and manufacturing. Contact: [email protected] or 860-553-6604.

WC Calculator: http://www.reduceyourworkerscomp.com/calculator.php
TD Calculator: http://www.reduceyourworkerscomp.com/transitional-duty-cost-calculator.php

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