California employers are constantly wedged between that proverbial rock and hard place when it comes to insurance, particularly workers comp. California state law requires that all companies doing business in the state have workers comp coverage no matter the size – ostensibly to protect workers in case of injury on the job. There is nothing wrong with this except the costs of wc insurance have become prohibitively expensive for small and large employers alike.
When Schwartzenegger was elected, some were happy, many others were sad. Politics aside, many employers were just hopeful that he would make some changes that would benefit business in California. We became really hopeful, if not excited, that he was starting with workers comp regulation. Opinions regarding progress are mixed, to say the least. One reader of the SF Chronicle states “Workers’ comp on the mend” while the LA Times quotes State Insurance Commissioner John Garamendi as saying that insurers haven’t passed most of their savings on to the state’s employers. (registration required).
I personally think that a little bit of both is true, that things are starting to get better. But we’ve also got a long way to go. Employers can’t keep absorbing the exorbitant costs year after year after year without having to sacrifice other things (such as benefits or jobs). Some improvements are being seen, particularly when it comes to which doctors employees can go to once an injury is sustained, which in turn is increasing return to work in small, but somewhat noticeable increments. It doesn’t change the fact, however, that the costs need to be regulated and the regulation should come from the State of California, as it is the state that requires all California employers to carry wc insurance. It is somewhat comforting to know that the Workers Compensation Rating Bureau is “seeing a 14 -16% drop since 2003”. All we can do now is wait and see what happens next.
Don’t even get me started on health insurance costs…at least not right now.