AB 2883 - Notice of Change in Law Effective January 1, 2017

This is a significant change in workers' compensation which will impact those that currently have coverage excluded for owners, partners or managing members.  If you currently have corporate  owners with less than 15%  ownership, you will not be able to excluded them.  If you are an LLC you can only exclude managing members.  Many LLCs have members who are not managing members so this will need to be changed.  Note, all excluded people on a workers' compensation policy will need to sign a new waiver of coverage prior to January 1 2017.  You should talk to your accountant or attorney right away to discuss how this may impact your business.



Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA  94116
shauge@cal-insure.com
415-680-2188

 

October 10, 2016 Re: AB 2883 - Notice of Change in Law Effective January 1, 2017 Officer, Director, Partner and Member Exclusions Dear Valued Agent: As you may be aware, there is a change in California's workers' compensation law that takes effect on January 1, 2017 for all new, renewal and inforce polices related to the exclusion of officers, directors, partners and members. We want to alert you and your customers of these changes and actions Zenith is taking to help through the transition. The new law, AB 2883, makes the following changes: Any eligible individual (officer, director, general partner, managing member) electing exclusion from workers' compensation benefits must provide a signed waiver to the insurance carrier prior to January 1, 2017  For corporations, officers and directors (i.e., members of the Board of Directors) must now also meet a 15% ownership threshold in order to be eligible for exclusion For partnerships, only general partners are eligible for exclusion For LLCs, only managing members are eligible for exclusion We are aware that various parties have been interpreting the law as applying to policyholders only as they renew.  Both the Division of Industrial Relations and the California Department of Insurance have been considering the new law and we expect them to issue guidance shortly that the law applies to inforce policies as of January 1, 2017. As soon as these governmental agencies issue their statements, our intent will be to send to each of our agents a complete list of their affected policyholders and samples of the letter and waivers we will be sending to these policyholders shortly thereafter. To be excluded (if still eligible under the new law), each eligible individual must sign the written waiver of workers' compensation benefits certifying that he or she qualifies for exclusion. Employers or employer representatives may not sign on behalf of the individual electing exclusion. In order to maintain existing exclusions under these policies without interruption, it will be imperative that we receive completed and signed waiver forms for each eligible individual electing exclusion as soon as possible, but no later than December 31, 2016. Failure to return the forms by this date will render the exclusions invalid by operation of law.  We understand that this new law is taking effect under very challenging circumstances, including the short notice period and disruption of having this take place at year-end. We are committed to minimizing the impact to you and your customers as best we can. Sincerely, Paul Ramont Executive Vice President, Chief Underwriting Officer Zenith Insurance Company ZNAT Insurance Company

Three Key Bills that SB Cal Successfully Secured Either the Gov's Signature or Veto

Please see below  details on three very important  bills impacting California’s small businesses.  The Governor signed  SB 1160,  which  will stream line the Utilization Review workers compensation  claims process and will expedite payment to injured workers,  saving  hundreds of millions of dollars . The Governor signed  AB1244,  which will suspend any physician, practitioner or provider from participating in the workers compensation system  if the physician, practitioner or provider has been convicted of any felony or misdemeanor for abuse of the Medi-Cal program. The Governor vetoed AB654, which would have expanded  the Family Medical Leave Act under the California Family Rights Act to prohibit an employer with 20 or more employees from refusing parental leave for employees with 12 months service.

Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA  94116
shauge@cal-insure.com
415-680-2188




SB 1160 (Mendoza) Workers’ Compensation Signed by the Governor:  SB Cal actively participated in Department of Industrial Relations Director Christine Baker’s stakeholder meetings and worked with labor, the Senate Labor and Industrial Relations and Assembly Insurance Consultants, and the workers’ compensation community to develop and finalize SB 1160.  This bill will make numerous changes to the utilization review (UR) process and among other things, streamline the workers’ compensation claims process during the first 30 days of a claim. SB 1160 will also ensure better data collection, necessary to determine benefit delivery and whether benefits are paid at the appropriate amount, by increasing the penalty on claims administrators who fail to report their claims data to the WCIS (Workers’ Compensation Information System).  This bill also makes important changes to the lien filing processes by reducing unnecessary lien filings and will clarify existing law on collections companies who attempt to bill employers with lien assignments.  Ultimately, SB 1160 will reduce delays in the providing medical care and expedite appropriate treatment by increasing the communication between treating physicians and UR reviewers.  This was a consensus bill between the stakeholders.  The concerns and recommended system improvements were raised by the stakeholders, following the enactment of SB 863 in 2012.  The issues were discussed and several studies approved by the Commission on Health and Safety and Workers’ Compensation whose membership is comprised of labor and management representatives were used in the development of this bill.  SB 1160 is projected to save California businesses over $800 million in workers’ compensation costs.  This translates into better and more efficient care for our injured workers and lower costs paid by small businesses.

AB 1244 (Gray) Workers’ Compensation Physician Fraud Signed by the Governor:  SB Cal actively participated in the stakeholder discussions that resulted in the development of this bill.  AB 1244 will require the administrative director of the Division on Workers’ Compensation to suspend any physician, practitioner, or provider from participating in the workers’ compensation system if, among other things, the physician, practitioner, or provider has been convicted of any felony or misdemeanor involving fraud or abuse of the Medi-Cal program, Medicare program, or workers’ compensation system.  Assembly Bill 1244 will also prohibit participation in these programs, if the individual’s license, certificate, or approval to provide health care has been surrendered or revoked, or if that individual or entity has been suspended, due to fraud or abuse, from participation in the Medicare or Medicaid programs. Furthermore, this bill will require the administrative director to adopt regulations for suspending a physician, practitioner, or provider from participating in the workers’ compensation system pursuant to these provisions and would require the administrative director to furnish to the physician, practitioner, or provider written notice of the right to a hearing regarding the suspension and the procedure to follow to request that hearing. The bill will require the administrative director to promptly notify the appropriate state licensing, certifying, or registering authority of a physician’s, practitioner’s, or provider’s suspension and to update the division’s databases of qualified medical evaluators and medical provider networks. This comprehensive measure would require the administrative director to notify the chief judge of the division of a suspension under these provisions, as specified, and post a notice on the department’s Internet Web site. The bill would enact special lien proceedings for the adjudication of any liens of a physician, practitioner, or provider who has been suspended pursuant to these provisions because he or she has been convicted of a felony or misdemeanor that meets specified criteria. Assembly Bill 1244 (Gray) is a very important bill that will effectively reduce the fraud associated with providers who take advantage of injured workers through inappropriate treatment.  Small businesses pay for the added costs associated with provider fraud which results in increases to their workers’ compensation premiums.
 

AB 654 (Jackson) Parental Leave Vetoed by the Governor:  SB Cal actively opposed SB 654 that would have expanded the Family and Medical Leave Act (FMLA) under the California Family Rights Act (CFRA) to prohibit an employer with 20 or more employees from refusing to allow an employee with more than 12 months of service with the employer, and who has at least 1,250 hours of service with the employer during the previous 12-month period, to take up to 12 weeks of parental leave to bond with a new child within one year of the child’s birth, adoption, or foster care placement. Additionally, this bill would have prohibited an employer from refusing to maintain and pay for coverage under a group health plan for an employee who takes this leave. Existing law already prohibits an employer from refusing to allow a pregnant employee to take a leave of absence after the birth of the child for up to 4 months before returning to work. Existing law also prohibits an employer from refusing to maintain and pay for coverage under a group health plan for an employee who takes that leave.  SB Cal made it very clear to the Governor that if enacted, SB 654 would create a hardship on small businesses with 20 or more employees by imposing a mandate that these employers provide a 12-week protected leave of absence.  This would have been especially difficult for small businesses who have multiple employees who already have protected leave and because the employer must hire and train a temporary employee to cover the employees’ duties.  

2016 proved to be a very important year for Small Business California and its members in ensuring the Governor’s signature on two bills that will remove hundreds of  millions of dollars out of our state’s workers’ compensation system, thereby significantly reducing costs to small businesses, and securing the Governor’s veto on the expansion of the CA Family Rights Act that would have put an extreme hardship on the backs of California’s small businesses.  SB Cal is truly the Big Voice for Small Business!

 Lori Kammerer

Governmental Affairs

Small Business California

Governor Signs SB Cal - Supported SB 482 (Lara)

Please see information from Lori our  Government Affairs person on SB482. The bill was signed by the Governor yesterday.  Christine Baker, head of the Department of Industrial Relations, is especially to be applauded for her work on this bill.
 
Scott Hauge
President
Small Business California
2311 Taraval Street San Francisco, CA  94116
shauge@cal-insure.com
415-680-2188 

                

Hi Scott,

Congratulations to You, SB Cal’s Board and its members on the great news that the Governor signed SB 482 (Lara), sponsored by Small Business California.  This bill would require all prescribers issuing Schedule II, III and IV drugs to consult California’s Controlled Substance Utilization Review and Evaluation System (CURES) before prescribing.  Small Business California partnered with labor organizations, the CA Medical Association and several attorney groups to negotiate this bill that will help physicians make better informed decisions on the opioids they are prescribing.

Currently, 49 states have prescription drug monitoring programs in place (1).  In 1996, California enacted the first, what is today known as the CURES system, managed by the Department of Justice (DOJ). The system tracks the prescription of Schedule II and III narcotics, the strongest pain killers on the market.  Current law requires all practitioners with licenses to dispense Schedule II and III drugs, including doctors, nurses, optometrists, among others, to enroll in CURES by January 1, 2016 or on their license renewal date. The DOJ completed its upgrade of the system to accommodate the new users earlier this year.  Historically, physicians consulting the CURES system has been voluntary with many prescribers not checking the database before prescribing Schedule II, III and IV drugs.

Other states that have required prescribers to check their drug monitoring systems have seen significantly improved public health outcomes. In 2012, Tennessee required prescribers to check the state’s prescription drug monitoring program before prescribing painkillers. Within one year, they saw a 36% drop in patients who were seeing multiple prescribers to obtain the same drugs (2).  In Virginia, the number of doctor shoppers fell by 73% after use of the database became mandatory. In Oklahoma, which requires mandatory checks for methadone, overdoses fell about 21% in a single year.

According to the Centers for Disease Control and Prevention, drug overdoses are the top cause of accidental death in the United States (3).  Nearly 23,000 people died from an overdose of pharmaceuticals in 2013 nationally – more than 70% of them from opiate prescription painkillers.  The CURES database is an invaluable investigative, preventive, and educational tool for law enforcement and the healthcare community.

According to the California Attorney General's Office, if doctors and pharmacies have access to controlled substance history information at the point of care, it will help them make better prescribing decisions and cut down on prescription drug abuse in California.  The current voluntary approach has not been able to attract sufficient participation to make it truly effective.

Senate Bill 482 requires all prescribers to consult the CURES system before issuing Schedule II, III and IV drugs. This will enable prescribers to make informed decisions about their patient’s care and limit the number of people who doctor shop and over use prescription drugs. This bill will only become operative once the AG’s office certifies the system update is fully operative. Additionally, prescribers will not be held liable if at the time of the prescription CURES is unavailable.

This bill is of significant importance to reducing the amount of prescription medications in our workers’ compensation system.  Currently, 44% of all medical treatment disputes result from the prescribing of opioid drugs in high dose amounts and for long durations.  The overuse and overprescribing of these drugs result in higher premium costs to employers and delays in return-to-work for the injured workers.  Last year, SB Cal worked closely with the stakeholders to develop AB 1244 (Perea), signed by the Governor and effective January 1, 2016, that provides for a workers’ compensation drug formulary that would require a physician to follow treatment guidelines, in determining the safest and most appropriate treatment.  In many cases, opioids were determined to be overused and overprescribed.

Together, SB 482 and AB 1244 will ensure responsible prescription of opioid drugs to all patients, including our injured workers.  Other states that have implemented similar legislation have seen a dramatic drop in the prescribing patterns which has resulted in lower costs to business and better outcomes for the patients.

Congratulations once again!

Lori

…..

Lori Kammerer

Kammerer & Company, Inc.

1215 K Street, 17^th FL

Sacramento, CA 95814

Ofc: (916) 441-5674

Cell: (916) 716-5674

LCK@midtown.net

It's Time To Speak Out

As many of you know, Small Business California  is a big fan of the California Small Business Development program. As such, Small Business California has done a lot of Advocacy for the program over the years.  The SBDC works with about 50,000 small and medium sized firms throughout the state each year and they do a great  job keeping the focus on activities that impact California's economy.

This past June, the SBDC completed Year 2 of an Access to Capital program funded by the Governor's Office of Economic and Business Development (GO-Biz). For the year July 2015 through  June 2016 with only $2 million  in funding from the state, they helped secure over $208 million in capital  for the businesses they serve.  That is not a typo $208 million.

In the year July 2014  to July 2015 they received $2 million statewide and secured $2 million in capital.

Interestingly, California cut their funding by 25%  for  July 2016 to 2017 to $1.5 million.  Other states put a lot more resources towards this powerhouse program-- leveraging the SBDC's federal funds in the process.

What is really distressing is that there is no assurance that any of this  funding will be continued  in the July 2017 to  June 2018.

I applaud Go Biz for their  past funding  but this must be continued in the July 2017  through June 2018 year and beyond. I would ask all of you  to send an email to Panorea Avids the head of Go Biz.

Her email is Panorea.Avids@GOV.CA.GOV. Tell her how helpful this is for  hundreds of California’s small businesses and how  provides an incredible  rate of return on  California’s  investment.

It is time for small businesses around the state to have their voices heard.

Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA  94116
shauge@cal-insure.com
415-680-2188 

SB Cal Legislative Report

The two year legislative session ended August 31. Please find attached the bills  Small Business California sponsored, supported, opposed and were watching.
 

Of particular note are these bills which have gone to the Governor
 

SB482- This is the bill that would require health Care practitioner authorized to prescribe a controlled substance to consult with the CURES data base to review a patient’s controlled substance  history before subscribing a Schedule II,Schedule III or Schedule  IIII controlled substance. Small Business California supported
 

SB1380- This bill establishes the Homeless Coordinated and Finance Council to coordinate Homeless services Small Business California supported this.
 

SB 654. This bill will require business with 20 to 49 employees to provide 6 months of unpaid  parental leave  for bonding with their newly  born. Small Business California opposed this.

We were disappointed  that our crowd funding bill AB 2178 failed but we will be reintroducing next session.

Click the link to view the bills:

https://drive.google.com/file/d/0Bw-aHk-s7JkSYzFPMy1FVnJnUTg/view?usp=sharing

Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA  94116
shauge@cal-insure.com
415-680-2188 

Survey/ SB 1175

The results of our survey are in, we had 858 respondents. For all of you that responded thank you. The results can be accessed at www.smallbusinesscalifornia.org

SB 1175, sponsored by Small Business California and authored by Senator Mendoza, was signed by the Governor last week. This is a pretty straight forward bill that requires providers to get their bills to  the insurance carriers within a year of service. This should reduce liens being filed by providers outside the insurance companies Medical Provider Network. It may seem hard to believe, but this was costing about $800 million to the workers' compensation system.

Small Business California I believe was the only California business association to take a position on this.

Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA  94116
shauge@cal-insure.com
415-680-2188