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Governor signs 5-bill reform package to strengthen comp system

New Jersey Gov. Jon Corzine recently signed a package of five reform bills that lawmakers say will strengthen the state's workers' comp system to protect employees who are injured on the job.

"With today's bill signing, we are addressing issues between workers and their employer's insurance companies before a complaint is even filed," Corzine said upon signing the bills. "We're taking steps to make a cost-effective and efficient system even better so that injured workers receive the compensation they deserve."

Investigation prompts reforms. Earlier this year, an investigation by The Star-Ledger highlighted numerous problem areas within the state's workers' comp system. Specifically, the investigation found that the six-member board, which consists of workers' comp insurance company executives, has routinely given the bureau's executive director, Grover Czech, and other staff members raises and bonuses, despite the fact that the bureau had recommended six straight increases in premium rates. These increases, the study found, have increased the total amount paid to workers' comp insurers by more than $600 million annually.

Sen. Paul Sarlo, D-Bergen, introduced the reform legislation in response to the investigation. Part of the legislative package would make several changes to the state workers' comp system, including reforms to the rate-setting bureau. Sarlo, who is also chairman of the Senate Labor Committee, called the legislation a positive response to changing a "basically good system to make it even better."

"We gave workers' comp judges the power they need to crack down on the bad players in the system while ensuring greater fairness to both workers and employers," he said. "The sanctions in this reform program should make it untenable for companies to forego workers' comp coverage for their employees and it also makes it a lot more uncomfortable for workers who try to game the system. Now, proof of coverage under the workers' comp system will be a condition for doing business in New Jersey."

The legislative package included the following bills:

S. 1913/A.B. 2966. Corzine said this bill increases the power of judges of compensation and provides them with the necessary tools to enforce workers' comp law against insurers, employers or attorneys who fail to comply with a judge's orders or deadlines.

S. 1914/A.B. 2967. This bill strengthens enforcement against employers for failure to provide workers' comp coverage. Employers who fail to provide workers' comp will be subject to enhanced administrative and criminal penalties.

S. 1915/A.B. 3059. This legislation ensures that all eligible workers are covered by their employers by requiring employers to submit proof of workers' comp coverage on their annual reports filed with the Department of Treasury.

"By strengthening the penalties for breaking the law and ignoring the requirement to offer workers' compensation insurance, we will ensure hardworking New Jerseyans who get injured on the job have coverage in their time of need," said Assemblyman Peter Barnes III, D-Middlesex.

S. 1916/A.B. 2968. This bill ensures that workers' comp cases involving emergent medical issues are heard in a timely manner and that treatment and compensation is delivered when it is needed. As a result, lawmakers said claims involving a worker who is denied medical treatment will be prioritized when a doctor certifies that immediate care is needed.

"Each year thousands of New Jersey's workers injured on the job find that they can't make ends meet when their workers' comp benefits are held up by bureaucratic red tape or the courts," said Assemblyman Joseph V. Egan, D-Middlesex, and chairman of the Assembly Labor Committee. "This is simply unacceptable. These are hardworking people, and they deserve -- if not absolutely depend on -- access to these benefits."

S. 1917/A.B. 2969. This bill will add new members to the state's Compensation Rating and Inspection Bureau governing board from sectors outside of the insurance industry and clarifies its authority. The members will represent organized labor, employers, and the general public.

For more information, visit Gov. Jon Corzine's Web site at www.state.nj.us/governor or contact Sen. Paul Sarlo at (201) 804-8118.

November 5, 2008

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