California Workers’ Compensation Reform SB 863 Analysis: Permanent Disability Provisions

California Workers’ Compensation Reform SB 863 Analysis: Permanent Disability Provisions

***WARNING: The following analysis is based on the 8/24/2012 and 8/27/2012 versions of SB 863. On 8/31/2012, the Legislature passed SB 863. Be sure to check the final version of SB 863 posted on the Legislature website.***

***NOTE: Robert G. Rassp has written a 14-page article analyzing the 8/30/2012 version of SB 863 and Permanent Disability. The article is for sale on the LexisNexis Bookstore. For further information, click here.***

SB 863 proposes major changes to permanent disability benefits.

According to the 8/24/2012 version of SB 863:

1. DOI on or after 1/1/13 includes WPI with Guzman alternative ratings allowed, multiplied times a 1.4 adjustment factor (that apparently replaces all DFEC adjustments) plus adjustment for age and occupation.

2. Payments for PD are paid at the TTD rate.

3. Payment for PD up to 55% is at $230.00 per week maximum, payment for 55% to 69% is paid at $270.00 per week maximum; payment of 70% PD to 99% is paid at $290.00 per week.

4. All PD up to 99% in 2014 injuries are paid up to $290.00 per week maximum.

5. Sleep disorders, psyche and sexual dysfunction are still out if a consequence of a physical injury except see #6 below. But employer must provide treatment for sleep disorder, sexual dysfunction and psyche that are compensable consequential to a physical injury. But see exception to psyche in #6. But, query: Since sleep disorder and sexual dysfunction cannot be part of a WPI rating for compensable consequences of a physical injury, does this statute mean that since sleep and sexual functioning are ADLs under Table 1-2 on page 4 of the AMA Guides, a physician CANNOT add up to 3% WPI for pain related effects on these ADLs? We will see where this goes if this provision is enacted as written.

6. Psyche is allowed if there’s a violent act or if in proximity of a violent act or if there is a catastrophic injury. SB 863 doesn’t fully define "catastrophic injury", however.

In the 8/27/2012 version of SB 863:

This is slightly different from the August 24th version that was introduced last week. For example, PD is NOT paid at the TTD rate as proposed in the prior version. It looks like the IMR provisions allow the Applicant to submit outside material to the IMR reviewer.

The 8/27/2012 version eliminates #2, above, in that PD is not paid at the TTD rate. But they did keep in new section 4650(b)(2) that says if the IW is earning 85% of DOI earnings at the same employer at MMI or at least 100% of DOI earnings with another employer at MMI then no PD is paid until an Award is issued.

They did not increase the number of weeks of PD but only the weekly rate for PD at 55% to 69% and 70% to 99% for DOI between 1/1/13-12/31/13 and 1%-99% for injuries occurring after 1/1/14 (all of them at $290.00 per week maximum).

Also, the 15% "bump up" still applies if the employer has 50 or more employees but does not offer regular, modified or alternative work. There is no longer a 15% bump down if the employee returns to work. It is paid at the weekly "flat rate."

Again, please be cautioned that all of these provisions could change at any time prior to floor votes in the senate and assembly between now and Friday night, August 31!

© Copyright 2012 Robert G. Rassp, Esq. All rights reserved. Reprinted with permission.

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LexisNexis Series on California Workers' Comp Reform SB 863:

***WARNING: The following analyses are based on the 8/24/2012 and/or 8/27/2012 version of SB 863. On 8/31/2012, the Legislature passed SB 863. Be sure to check the final version of SB 863 posted on the Legislature website.***

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