Assembly Bill 211: Supplemental Job Displacement Vouchers

Reeducation Voucher Delivery Resurfaces in Assembly
By Greg Jones, reporter

California injured worker advocates are trying again to expedite the delivery of vouchers intended to offset the costs of retraining claimants unable to return to their usual work following a workplace accident, saying the current system frustrates workers and prevents them from taking full advantage of rehabilitation opportunities.

Voters Injured at Work and Latino Comp co-sponsored Assembly Bill 211, which was introduced on Jan. 31 by Assembly Member Gilbert Cedillo, D-Los Angeles. The bill would make supplemental job displacement benefit (SJDB) vouchers available earlier in the claims process for newly injured workers.

The Assembly bill would make a $6,000 voucher available 60 days after a claimant has exhausted temporary disability benefits, provided the claimant is no longer able to perform his usual work because of the injury and his employer is unable to make accommodations to bring him back to modified or alternate positions, and his physician has determined that the disability is permanent and stationary. The legislation also has an allowance of up to $1,000 for the purchase of a computer and $500 as a miscellaneous expense that doesn’t need to be itemized or deducted.

If passed, the provisions in Cedillo’s bill will apply only to injuries occurring on or after Jan. 1, 2012.

“This bill would improve the timing of SJDB for injured workers by making the voucher a flat amount of $6,000 and changing the date that an injured worker is eligible to receive the voucher to when the physician has determined that the disability has become permanent and stationary,” said Conrado Terrazas, communications deputy for Cedillo. “This bill expands the use of the voucher to include the purchase of tools required by an educational or training program, the purchase of computer equipment, and payment for travel, among others.”

Jesse Ceniceros with Voters Injured at Work said the current time frame for delivering the SJDB vouchers makes these benefits available too late to be of much use for many injured workers.

“Injured workers aren’t getting any type of retraining and the majority of injured workers, by the time they reach the point where the voucher should be accessible to them, they’ve already moved on with their lives and a lot of them are actually really hurting and they’re settling for the voucher for pennies on the dollar,” Ceniceros said. “If they would be eligible for a $6,000 voucher, I’ve seen them go for as little as $300.”

Under the current system, injuries that occurred on or after Jan. 1, 2004, are covered by Section 4658.5 of the California Labor Code. Under this section SJDB benefits are available only after an award of permanent
disability. Voucher amounts are determined by the permanent disability rating, with injured workers with awards under 15% eligible for $4,000; 15% to 25% eligible for $6,000; 26% to 49% eligible for $8,000; and anything greater eligible for $10,000. These provisions would remain in effect for injuries that occur between Jan. 1, 2004,  and Jan. 1, 2012.

Cedillo introduced legislation similar to AB211 in 2008 and 2009. The wording in the current bill is identical to Senate Bill 3, which he introduced in 2009, with the only exception being the date of injuries covered.

In 2007, then-Gov. Arnold Schwarzenegger vetoed a substantially different bill that had a similar goal.

The wording in Senate Bill 942, introduced by then-Sen. Carol Midgen, D-San Francisco, proposed making the vouchers available if an employer is not able to accommodate an injured worker’s condition within 60 days of a disability becoming permanent and stationary. The legislation required employers to estimate a percentage of disability when determining the amount of money that would be provided, and make adjustments later if the estimated impairment rating was different from the assigned impairment rating.

In his veto message, the governor said the bill addressed a legitimate problem but was vague and would lead to more litigation. He urged the sponsor, Voters Injured at Work, to try to build a consensus with employers and businesses that would address the issue of vouchers as part of a larger effort to improve return-to-work
opportunities.

Ceniceros said efforts to build a consensus of insurance, employers and labor failed ultimately, but the
discussions led to the legislation his organization has sponsored since those talks broke down, including AB211.
Mark Gerlach, a consultant with the California Applicants’ Attorneys Association (CAAA), said settling on a flat rate of $6,000 when some claimants might be entitled to more was a compromise that was intended to make some money more readily available to those who wanted to avail themselves of the benefit.

“There are a number of cases in which an applicant ends up with less money this way,” he said. “From the
standpoint of the worker who actually wants to use this money to provide training or schooling that he or she needs, getting it in a timely manner is just as — if not more — important than getting a couple extra thousand dollars.”

Jason Schmeltzer with the California Coalition on Workers’ Compensation said that the delivery of SJDB
vouchers could be improved, but in the past his organization didn’t support moving up the time frame for determining eligibility.

“We agree that would be a good idea, but in workers’ compensation claims, things need to go in a certain order because it is a regulated, administrative-heavy system by law, not by desire, and certain benchmarks and certain phases in the claim need to be completed before the next phase can start.” he said. “Cedillo has rightly tried to improve upon the benefit that is there now, we just haven’t been able to get there on the specifics because the specifics of the bill haven’t always made sense in the administration of a claim.”

Schmeltzer said he has not reviewed the current proposal and the coalition currently does not have an official position on it. However, he did say he hopes discussions will be more productive this year.

Gerlach said the legislation makes sense in light of efforts by employers to stress return-to-work programs and a recent Rand Corp. study that concluded improving return-to-work times was the best way to control costs for businesses without cutting benefits for workers.

CAAA supported Cedillo’s legislation in 2009, but Gerlach said the organization does not have an official position on the new bill because it has not fully reviewed it.

“It’s an issue that certainly deserves a lot of attention given the emphasis employers and insurers are putting on return-to-work,” he said. “There is ample evidence that the current procedures for trying to get the minimal help that is provided by supplemental job displacement benefits to the injured worker is getting to them too late and is not really helpful to them and if we seriously want to attack the return-to-work issue, this type of change is imperative.”

Gerlach said many workers aren’t taking advantage of the vouchers because the system doesn’t work well.  The use of the vouchers dates back to reform efforts in 2003, when lawmakers decided to scrap vocational rehabilitation and also revise the medical fee schedule and utilization control process.

Gerlach said the criticism with the vocational rehabilitation program wasn’t as much related to costs as it was related to what he considered an erroneous assumption that the rehab program didn’t work. However, based on  an analysis by the Workers’ Compensation Insurance Rating Bureau (WCIRB), spending on rehab after instituting the vouchers has dropped dramatically, suggesting to Gerlach that the current system doesn’t work well either.

WCIRB said insurers spent $470,716,000 on vocational rehabilitation in 2005. By 2009, that number dropped to $48,944,000, a decline of more than 89%.

Ceniceros with Voters Injured at Work said his organization is open to talk with any stakeholders interested in addressing this issue, but as he said in years past, this issue is too important to wait for a consensus before moving ahead.

He also said he is optimistic that new Gov. Jerry Brown will be more amenable to the legislation than his
predecessor.

“We’re hoping that the voters sent the message this last election year that we want a governor in there who is going to be working for the people,” he said. “As you know, Gov. Schwarzenegger did absolutely nothing but work for the insurance industry and business, and in workers’ comp, there were billions of dollars of profits made on the backs of injured workers.”

To read AB211, click here:
http://www.workcompcentral.com/pdf/2011/misc/Cedillo2011AB211.pdf.