A California bill that allows out-of-state athletes to receive workers' compensation benefits for injuries sustained on the state's sports fields is advancing, inciting mixed responses from players in the insurance industry.
“Workers' compensation, while it is paid by employers in the state, is causing more than 4,000 claims in California, often including payouts to athletes that have only played a game or two here,” says Gary Toebben, Los Angeles Area Chamber of Commerce president and CEO, who supports the measure. “The state has a guarantee corporation, funded by taxpayers, that assumes responsibility for claims made and approved in the state, so out-of-state claims cause rates to be driven up for employers and taxpayers in the long run.”
Currently, anyone paying taxes to the California may receive benefits from its $12 billion workers' compensation system, including professional athletes who have played as little as one game or inning there. Upwards of 4,500 sports-related claims have been filed in California since the 1980s, resulting in $747 million in payouts.
Professional players from teams in 49 states file claims within California, even if they receive money for the same or similar claim(s) in their home state. These cases typically include six-figure payouts for injuries like cumulative trauma: NFL member Terrell Davis played for the Denver Broncos but received $199,000 in California. Michael Irvin played for the Dallas Cowboys, and received $249,000 under workers' compensation in California.
Assemblyman Henry T. Perea's (D-Fresno) bill AB1309, which has passed state legislature and is expected to hit the governor's desk later this month, will exempt employees outside of California and their employers from the state's workers comp laws unless the athlete has worked 20 percent or more of his/her career in California, or has worked for fewer than seven seasons anywhere else.
Opponents of the bill are crying foul.
“Calling the California workers' compensation law a 'loophole' is a fallacy—anyone that has played in California and got hurt in California pays state taxes and is entitled to benefits here,” says former NFL player Mel Owens, a county attorney for NBO Law who represents at least 1,000 retired football players suing for workers' compensation in the state.
He says workers comp costs caused by professional athletes are “one-tenth of one percent” of losses carried by the California system.
According to Rachel Hooper, a spokesperson for the NFL Players Association, professional athletes, including those who come from out of state to play against a California team, will pay nearly $300 million in income taxes to the state this year.
“Workers' compensation for athletes in California was worked out through a collective bargaining agreement. [The bill] allows their employers to go back to the bargaining table and say 'bail us out' of $1 billion in liability, because they know the ramifications of sustaining an injury in the NFL.
Those claims, which the NFL and workers' compensation insurers pay for, are then shifted onto the public through social security, disability and Medicare.”
The risk of death associated with neurodegenerative disorders is three times higher among NFL players than the rest of the population, says the National Institute for Occupational Safety and Health (NIOSH).
Says Owens, “I played in the NFL, and what they say about the injuries is true.”
Want to continue reading?
Become a Free PropertyCasualty360 Digital Reader
Your access to unlimited PropertyCasualty360 content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Breaking insurance news and analysis, on-site and via our newsletters and custom alerts
- Weekly Insurance Speak podcast featuring exclusive interviews with industry leaders
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical converage of the employee benefits and financial advisory markets on our other ALM sites, BenefitsPRO and ThinkAdvisor
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.