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Assembly Bill 335

Posted on 28 February 2011 by admin

Bill Would Allow Shorter, More Concise Benefit Notices

By Greg Jones, reporter

A bill introduced this month in the California Assembly would create shorter benefit notices written in “plain language” and an online booklet explaining rights and obligations, improving the quality of information delivered to injured workers while reducing costs by a projected $42 million annually, according to supporters.

Assembly Bill 335 by Jose Solorio, D-Santa Ana, would overhaul how information is disseminated to injured workers. It requires the administrative director of the Division of Workers’ Compensation (DWC) to work with the Commission on Health and Safety and Workers’ Compensation (CHSWC) to create a book detailing the claims process that will be available online. The book will also be available for pick up at district offices or can be mailed at the request of an injured worker who doesn’t have access to the Internet.

The legislation also requires DWC notices be written in “plain language” and reference the booklet so injured workers can understand the context of any notice they receive. Solorio’s bill would also delete the current requirement that notices be delivered by certified mail.

Jason Schmelzer, a legislative advocate with the California Coalition on Workers’ Compensation, said the legislation is common sense and benefits employees and employers. The coalition asked Solorio to introduce the legislation.

“It allows the commission to work together with the administrative director for the Division of Workers’ Compensation to revise the notices and to make them more beneficial and more useful to the injured worker and less onerous for employers,” Schmelzer said. “It’s a benefit-notice streamlining bill.”

The bill proposes changes to California Labor Code Sections 138.4, 3550, 4060, 4061, 4658.5 and 5401.

The language in AB 335 is taken verbatim from a July 2010 CHSWC study that found benefit notices were overly wordy, redundant and contained information not needed by all workers. The study also found that the notices were complex, vague and confusing to workers, and that it was difficult for employers to keep the different notices properly updated.

The commission concluded that some of the top priorities should be relaying necessary information to workers when it is needed, using plain language and providing background information and explanations about the claims process early and continually.

Making information and forms available online, including the DWC form to request a qualified medical examiner panel and fact sheets about temporary and permanent disability benefits would result in shorter notices, allow claims administrators to better communicate and help workers understand their rights and obligations, supporters say.

Christine Baker, executive o fficer with CHSWC, said there are a lot of notices and the commission would rather see a notice sent for the start and stop of benefits along with an explanation about how to find information from the more comprehensive booklet. California used Form DIA 500, a one-page status notice, in the 1980s.

The CHSWC study said its proposed changes would result in a net savings of about $42 million a year.

The program could cost between $300,000 and $650,000 based on the estimated $5 cost of printing and mailing the new booklet to the approximately 16% of injured workers who don’t have access to the Internet.

That cost would be offset by savings realized by employers, however. CHSWC estimates that employers could reduce legal defense expenses by $43 million a year. Insured employers pay legal defense expenses of about $607 million a year, representing 70% of all workers’ compensation claims. For all employers, the estimated cost is $867 million.

“We assume, conservatively, that providing comprehensive information early in the claims process and substantially clarifying the information in the benefit notices will reduce legal defense expenses by 5%, or $43 million per year,” the CHSWC study says.

Schmelzer said members of the California Coalition on Workers’ Compensation thought the study contained reasonable reform proposals.

“The commission has demonstrated the ability to do good work and convene multiple stakeholders on issues like benefit notices and come up with good ideas,” Schmelzer said. “What lacked in the past, I guess, is people grabbing onto those ideas and doing something with them.”

Schmelzer doesn’t expect any opposition to AB 335, which has not yet been assigned to committee. He said it looked like all stakeholders buy into the idea of making more information available online and putting it in plain language.

Baker with CHSWC said a working group is already developing recommendations so the process “can move forward quickly” if AB 335 is signed into law.

“Benefit notices are an important part of the system,” Schmelzer said. “The clearer they are and the better they do at communicating what they’re supposed to communicate, the better it is for everybody in the system.”

Jesse Ceniceros with Voters Injured at Work said he hasn’t fully reviewed AB 335 yet, but he would like to see some notification delivered to injured workers via certified mail so there is proof of delivery. He also expressed concern that in making notices shorter, important information could be omitted.

“As it is, the process is difficult enough to maneuver through,” he said. “Any necessary information that doesn’t get to injured workers is adding confusion to an already confusing system.”

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