AIA Voices Cost Worry On Calif. WC Plan
NU Online News Service, Feb. 1, 1:45 p.m. EST?The deal struck yesterday between legislative leaders and Calif. Gov. Gray Davis for a workers' compensation package, including a $2.5 billion benefits component, should include a cost savings component, an insurers' organization said.
With details of the plan still unclear, the American Insurance Association, based in Washington, D.C. commented today that the measure announced by Democratic legislative leadership "was negotiated with labor and trial lawyers behind closed doors."
"Insurers and employers who are responsible for paying for and implementing this system were not included in the negotiations. We are eager and anxious to see what they have agreed to before this bill continues on its fast-track to the governor's desk," said Mark Webb, AIA vice president for state affairs.
"California's workers' compensation system is broken and must be fixed," said Mr. Webb. "AIA has agreed that injured workers are in need of a benefit increase since negotiations to reform California's ailing workers' compensation system began in 1999, but benefit increases must be balanced with measures to reduce inefficiencies and control skyrocketing costs.
"California continues to have a defective system," he continued. "Carriers are insolvent, businesses are laying off workers, and local governments cannot balance their budgets. Now is not the time to add billions of dollars in increased costs without reforming a fundamentally flawed system.
"Now is the time to realize that a healthy economy is equally important to both workers and employers in California," said Mr. Webb.
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