Reforms in California Workers Compensation Insurance

The objective of the California workers compensation insurance system is to provide immediate medical care to workers injured on the job and to provide monetary benefits to compensate them for a portion of their lost salaries on a permanent or temporary basis. This welfare insurance program is planned to work as a faultless system. Under this program no burden of proof lies on the injured worker to prove that the workplace injury was caused due to the employer’s negligence. It works as an exclusive solution for employers and employees to resolve their workplace disputes without a recourse to the court of law.

In the California workers compensation insurance system a dynamic shift has occurred through a series of legislative reforms. These reforms have changed the focus of California’s compensation system on medical treatment and returning of injured employees back to their work. These reforms have assisted to minimize the instances of lawsuits thereby diminishing the avoidable frictional costs and shortening the unnecessary delays.
A compensation to injured employees is generally provided through one of the following two mechanisms:

• Self-insurance: Under this system employers including public agencies and large private employers may have an option to pay directly to their injured worker. Many smaller employers may also combine their resources to establish self-insurance groups.

• Insurance: Employers can also acquire a California workers compensation insurance policy from the State Compensation Insurance Fund or from any other private insurance company on behalf of their employees. In case of an accident or injury the employers can apply to the insurance policy for the reimbursement of all the medical and other expenses.

From the period of 2002 to 2004 the California legislature passed four noteworthy reform regulations. While these reforms changed many features of California’s workers compensation insurance chief portions of these new regulations sought to:

• Increase indemnity/monetary benefits to injured employees.

• Reinforce the control of medical expenses by reducing medical over utilization and accepting standards of evidence based medical treatments.

• Establish objective and consistent measurements for compensation under the permanently disabled benefits.

• Decrease expenses incurred in case of costly litigation.

• Increase inducements to get the injured employee back to his work.

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