CWCI: Temporary disability benefits exceeding pre-2004 reforms

The average amount of temporary disability benefits paid two years after the first payment exceeds the levels before legislative reforms were implemented. That's one of the findings of a report from the California Workers' Compensation Institute.

The report, Temporary Disability Outcomes in California Workers' Compensation, measures temporary disability outcomes following the enactment of S.B. 899. It analyzes claims with dates of injury through June 2009.

S.B. 899 expanded the California cap on temporary partial disability benefits to include temporary total disability payments and revised the time limit to 104 weeks of paid TD within two years of the first payment date. Additionally, it allowed an exception for specified injuries that typically require extended medical attention and allowed 240 weeks of temporary disability payments within five years of the date of injury.

Agency penalized for excluding contractors from coverage (03/22/12)
Wage-loss benefits not offset by worker's disability retirement benefits (08/06/12)
WCRI studies show recessionary impacts on state comp systems (01/05/12)
Appellate court outlines rebuttable parameters (10/03/11)
Latest Ogilvie decision causes new uncertainties in permanent disability (10/03/11)

The research updates previous CWCI studies and uses 24 months of data from 315,500 TD claims from accident years 2002 through the second quarter of 2009 to compare the average TD paid per claim and the average TD duration before and after S.B. 899 was signed. To control for statutory increases in temporary disability benefit levels, the authors adjusted all TD payments in the study sample to 2010 levels.

The studies point to initially lower average temporary disability payments and fewer paid temporary disability days immediately after the reforms took effect. But that changed by accident year 2006.

"Since hitting the post-reform low in AY 2005, the average amount of TD paid at 12 months has risen 11.3 percent -- from $5,436 to $6,050 -- as the average number of paid TD days has increased from 89.8 to 102.5," the report says. "Similarly, the average amount of TD paid at 24 months has increased by 13.4 percent from a post-reform low of $8,158 in AY 2004 to $9,255 in AY 2008, as the average number of paid TD days has climbed from 125.6 to 136.5."

The 12-month amount of $6,050 is only slightly below the $6,071 average for pre-reform claims from AY 2004. The 24-month average TD payments of $9,255 is higher the pre-S.B. 899 high of $8,994 in AY 2002.

"While the comparison of overall pre- vs. post-reform results suggests ongoing savings under S.B. 899, the latest post-reform data reflect aggregate results from claims with injury dates spanning a period of more than five years, and the post-reform reductions in TD payments were significantly less than those noted in earlier CWCI studies," the authors said.

Read more at the WorkersComp Forum homepage.

September 12, 2011

Newsletter Sign-up