President's Message

Two years have passed since 9/11.  How many changes to society have occurred since that day?  How has your life changed since that day?  It seems we have more on our minds now since that fateful day:  When will the troops return?  Where is Osama bin Laden?  Will al-Quaida attack again?  When?  Is America safer now?  How can I protect my family?  Am I more securely protected at work and home than I was two years ago?  Is there more that I can do to help?

Many of us have flown in airplanes since 9/11 and some have completely avoided flying.  The 9/11 attacks on America still terrorizes us to the point of changing our lifestyles in some cases.  Remember when security screening at the airport was bothersome and considered another hassle to deal with at the airport?  Now we welcome the extensive screening and gladly take off our shoes when asked.  Our opinions have changed since 9/11 because we all want to be safer.

I remember when security officers and those needing cardkeys were the only ones who wore employment ID badges.  If you forgot your badge for work, who cares?  Now I'm wearing three ID badges and rank it higher than having a driver's license.  Visitors to my building use to be greeted by a receptionist/gift shop entrepreneur.  Visitors are now greeted by a security guard, then empty their pockets and walk through a screening device, and escorted through the building.  Our workplaces have changed since 9/11 because we all want to be safer.

As adults, we are all seeing changes since 9/11.  What do the children see or remember or do they even notice?  My kids know that enemies destroyed two tall buildings, but they don't know who the enemies are or why they did it.  Do the children know how many lives were lost?  My son knows that his friend's grandfather died in one of the planes.  The kids may not see or understand the grand effect it has had on society but only how it has personally affected their lives.   The security issues in society may go unnoticed to kids because they have already become accustomed to them.  As adults, we are still trying to get use to them, and are constantly reminded of that fateful day.

In order to continue moving forward, we must continue to protect society in any way we can.  If we allow the memory to restrict the way we choose to live, then we are still being terrorized, and the terrorists have succeeded.  However, if we can be aware and work with society's changes, we will overcome our fears and soon we will be accustomed, like our children, to these changes.

Take the time to become involved or aware of your company's emergency preparedness program.  Overcome the fear factor by being prepared at work.  Perhaps you can make a safer working environment for you and your co-workers.  Take it a step further and bring this knowledge to your home.  Then ask yourself, "Am I more securely protected at work and home than I was two years ago?"  Your confident and fearless response will be, "Yes!"

Kathy Merkovsky
President, RIMS L.A. Chapter

Don't forget to bring a can of food for the canned food drive at the November 19th meeting, and don't forget to bring a toy for Toys for Tots at the December 10th holiday party.

So far, only New York has a hand-held cell phone ban for all drivers.  But as of June 2003, 10 states have legislation pending on hand-held cell phones for all drivers, according to the Governors Highway Safety Association.  Those states are Alabama, California, Illinois, Louisiana, Missouri, Nebraska, North Carolina, Oregon, Pennsylvania and Rhode Island.  Wisconsin has a complete cell phone ban pending.  New Jersey and Massachusetts have hand-held and complete cell phone bans pending.  Six states have bans against school bus drivers using cell phones, including Arizona, Arkansas, Illinois, Massachusetts, Tennessee and Rhode Island.  Maine has a ban on teen drivers using cell phones.

(Source:  National Safety Council Safe Driver August 2003)

Risk and Insurance Management Society, Inc. presents

For additional information please contact the Professional Development Department by telephone at 212.655.6212 or e-mail at pd@rims.org.

Press not permitted, but separate interviews may be arranged by e-mailing  pr@rims.org.

• The birth and care of the employee's newborn child

• Placement with the employee of a son or daughter for adoption or foster care

• To care for an immediate family member with a serious health condition

• When the employee is unable to work because of a serious health condition

By Ruth Lindstrom
 Legislation & Compliance Director

The California Legislature passed Assembly Bill 227 and Senate Bill 228, which contain workers' compensation reforms.  The authors of the legislation have claimed that the reforms provide $5.3 billion in one-time savings and $6 billion in on-going savings.  However, the Workers Compensation Insurance Rating Bureau (WCIRB) has estimated that the one-time savings are $3.5 billion and $2.6 billion in on-going savings.  The major reforms of the legislation are as follows: 

·      Repeal of Vocational Rehabilitation (for injuries occurring on or after January 1, 2004) - replaced by a voucher system to allow for retraining in a state     accredited retraining program.  The cost of the voucher will be based on the Permanent Disability rating.

·      Adoption of medical treatment controls and utilization review

o    Limits the number of physical therapy and chiropractic treatments   to 24 per claim       

o     Utilization review systems will be based on the American College of Occupational and Environmental Medicine Medical Practice Guidelines

·      Eliminates the presumption of correctness of the treating physician (except   for employee pre-designated physicians) regarding scope and extent of medical treatment

·      Reduction in the medical fee schedule 

The California's workers compensation system is currently estimated to cost employers $29 billion.  In 1995, the cost was $9 billion.  Hence, the estimated one-time savings of $3.5 billion and $2.6 billion in on-going savings represents a modest reform of the workers compensation system. 

The workers' compensation reform legislation did not come easily and there was all-out lobbying efforts by the interested groups - doctors, chiropractors, pharmaceutical companies, employers, attorneys and labor unions.  

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It is important to highlight the efforts of one employer coalition, the California Coalition on Workers' Compensation (CCWC).  Its Chair is Tim East, Director of Risk Management for The Walt Disney Company.  The CCWC is the largest statewide coalition of employers, public and private, dedicated solely to workers' compensation reform.  The CCWC was very involved in offering reform proposals to the Insurance Commissioner and various Legislators.

 As Legislation & Compliance Director of the LA RIMS Chapter, I met recently with Tim to get his assessment on this legislation.  He indicated that the legislation is a good start for reform and given the lower estimates provided by the WCIRB, can lay the groundwork for obtaining more comprehensive reforms for next year.  Tim described the legislation as addressing only the medical component of the workers' compensation claim and not the indemnity component and specifically, the inflated permanent disability ratings.   "One-half of all lost time cases have permanent disability ratings," he said.  Some degree of permanent disability is found more often in California than in any other state.    Tightening the permanent disability eligibility would address a major cost driver in the California workers' compensation system.  It is important to note that attorneys are paid their legal fees from the permanent disability payments and therefore, have an incentive to obtain higher permanent disability ratings for the claimant. 

 Tim also advised that there will probably be clean-up legislation and there may be legal challenges to the reform legislation.  When asked about a long-term lobbying strategy for keeping the workers' compensation reform process going, he provided the following advice: 

• Unite and stay active in the process;

• Stay informed;

• Take advantage of what reforms and court decisions offer.

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The challenges of maintaining the reforms and keeping the cause going are significant.  Those interested groups who want to keep the system costs high can raise large amounts of money and within a very short period of time.  Employer coalition groups thus far, have not demonstrated the same capability.  Given the $29 billion cost of the system, it is important to continue the lobbying effort for reform and/or redesign of the system.  The term limits imposed on our legislators means there is no institutional knowledge in Sacramento of the workers compensation system and therefore, makes it challenging for employer coalitions to inform and educate legislators on this complex and labyrinth system. 

During this past legislative session, workers compensation reform received a lot of press coverage because of the burden of high insurance premiums and the statements from businesses that jobs are fleeing California.  The Insurance Commissioner, John Garamendi, provided testimony to legislators that pointed out the burden of the workers' compensation system on businesses, governments, and non-profit organizations.  Tim also pointed out to me in my interview with him that the burden of the system on public entities and specifically, school districts was significant.  He said, "We spend more on workers' compensation per student, than we do on textbooks".   Given that profound anecdotal evidence, it is important for the Risk Management community to invest their time and effort to the long-term strategy of workers' compensation reform and/or redesign. 

The California Chamber of Commerce¹ has proposed the following workers compensation reforms for next year: 

• Tighten permanent disability eligibility ratings, and have them verified by objective medical findings.

• Extend the employer's right to choose a medical provider from 30 days to 365.

• Correct the definition of what it means to "cure and relieve" injured employees so that it is evidence-based.

• Require apportionment when the injury is to the same part of the body.

• Reform administrative penalties in the workers' compensation system that have acted as a perverse incentive for applicant attorneys to chase minor paperwork violations and turn them into large awards, and curbing other excessive litigation costs.

 ¹ California Chamber of Commerce Floor Alert dated September 12, 2003