Governor Newsom Vetoes AB 1213

Governor Newsom’s office announced this morning that he has vetoed AB 1213, which would have altered California’s 104-week cap on temporary disability (TD) benefits by excluding TD paid or due during the resolution of medical disputes if a utilization review (UR) treatment denial is overturned by independent medical review (IMR) or the Appeals Board. 

A CWCI Legislative Impact report published in June (click here) and provided to state lawmakers estimated that AB 1213 would result in a nominal increase in benefits for 0.9 percent of TD claims (less than 0.3% of all California workers’ compensation claims) but would create costly new oversight and compliance requirements for insurers, self-insured employers, and TPAs.  Chief among those would be the automation and programming costs required to update claims systems and the ongoing administrative costs for manual processes to identify and track claims with TD payments and UR and IMR activity — requirements that would have applied to every claims administrator in the state, further increasing California’s average loss adjustment expense, which has historically been the most expensive in the country.

The Governor’s veto message can be found here.

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