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Workers' compensation reforms appear possible in states where rhetoric, not action, had been the norm. On the flipside, experts predict a continued push from labor and industry groups in 2007 to undue reforms in other states. One such, not surprisingly, is California.

"We anticipate a very active year in California," said Bruce Wood, assistant general counsel of the American Insurance Association. "There's a full panoply of regulatory schedules aimed at undoing the reforms." The big issue will be Gov. Arnold Schwarzenegger's health-care plan. In early January, he announced reforms to extend health-care coverage to all of the state's 6.5 million uninsured residents.

"In addition, the California Division of Workers' Compensation is doing a study of claims experience that may lead to legislative and regulatory proposals," said Keith Bateman, vice president of workers' compensation for the Property Casualty Insurers Association of America. "The state will also be doing work on medical treatment guidelines. That is important because there are people who are trying to pick off utilization and fee schedules"

The Empire State has headed in the other direction. John Burton, professor emeritus in the School of Management and Labor Relations at Rutgers University, said reform efforts in New York have been building.

"New York has been trying for years to resolve the deadlock of workers' compensation reform," he said. "There is a lot of discontent on the employee side."

Burton said partial disability benefits were the sticking point for reform efforts. Attorneys, who are largely paid on settlements, fought to reduce the duration of nonscheduled, permanent partial disability benefits.

"Compromise and tradeoffs will have to be made, but the new governor (Gov. Eliot Spitzer) wants to do something about rising costs, which implies that he wants to do something about benefits," he said.

On March 6, New York's legislature passed a reform package.

South Carolina might also move from rhetoric to reform.

"South Carolina has been talking about reform for many years, and it looks like the governor (Gov. Mark Sanford) may be introducing a reform package this year," said Peter Burton, senior division executive of state relations for the National Council on Compensation Insurance.

Sanford, in his recent state address, said workers' compensation reform remains a priority in the coming year.

April 1, 2007

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