Carve-Outs in California CHSWC Meeting December 15, 2017 1 What - - PowerPoint PPT Presentation

1

California Department of Industrial Relations Commission on Health and Safety and Workers’ Compensation

Carve-Outs in California

CHSWC Meeting

December 15, 2017

What is a “Car What is a “Carve-Out”?

• Out”?
• An alternative system for delivering benefits to

injured workers and resolving problems and disputes

• A labor-management negotiated agreement
• Can cover all aspects of workers’ compensation

medical and benefit delivery

2

What is a “Car What is a “Carve-Out”?

• Out”?
• Negotiated separately and apart from the

collective bargaining agreement (non-construction)

• Workers’ compensation law allows unions and

union employers to create carve-outs 3

Car Carve-Outs: e-Outs: Legislation in Calif Legislation in California rnia

Key legislation:

• 1993 – SB 983 (New LC§ 3201.5). Permits

employers and employees in the construction and related industries to engage in collective bargaining for alternative workers’ compensation procedures.

• 2003 – SB 228 (LC§ 3201.7). Provides for carve-
• uts in any unionized industry.

4

Car Carve-Outs: e-Outs: Legislation in Calif Legislation in California (Cont’d) rnia (Cont’d)

• 2004 – SB 899 (Amended LC§§ 3201.5 and

3201.7). Provides that parties may negotiate any aspect of delivery of medical benefits and disability compensation for occupational injuries to employees that are eligible for group health and non-occupational disability benefits through their employer.

• 2012- SB 863 (Amended LC§§ 3201.7). Permits

State of California to enter into a carve-out. 5

To be eligible, a union must: be eligible, a union must:

• Be a bona fide labor organization and
• Be recognized or certified as the exclusive

bargaining representative of the employees involved

6

To be eligible, an em be eligible, an emplo ployer must: er must:

• In construction, have an annual workers’

compensation premium of at least $250,000; or be part of a “safety group” of employers that has an annual workers’ compensation premium of at least $2,000,000

• In all other industries, have an annual workers’

compensation premium of at least $50,000 and at least 50 employees; or be part of a “safety group” of employers that has an annual workers’ compensation premium of at least $500,000 7

Par Participation in Car icipation in Carve-Outs e-Outs

• Participation in carve-outs has increased

steadily:

• From 242 employers in 1995 to 1,552 in 2015
• From 3,450 employees (FTE) in 1995 to

79,400 in 2016

• From $157.6 million in payroll in 1995 to

$3.2 billion in 2016

8

Source: DIR/DWC

Car Carve-Outs b e-Outs by Pr Program T

• gram Type

pe

Employer Type Program Type Private Public Total Programs Construction 19 2 21 Non-Construction 5 31 36 Total Programs 24 33 57

9

Source: DIR/DWC as of 12/6/17

Car Carve-Outs b e-Outs by Pr Program and Union T

• gram and Union Type

pe

10

Source: DIR/DWC as of 12/6/17

Program Type Union Type Construction Non Construction Public Safety (Firefighter and Police) 27 Operating Engineers 3 Building and Trades 3 Carpenters 2 Industrial, Professional and Technical Workers (IPTW) 2 Laborers 2 Public Employees Association 2 Roofers 2 Service Employees (SEIU) 1 United Food and Commercial Workers (UFCW) 2 Electricians 1 Ironworkers 1 Janitorial - SEIU 3 Painters 1 Petroleum Workers 1 Plumbing and Piping (PIPE) 1 Public and Industrial (IUPIW) 1 Sheet Metal Workers 1 Transportation 1 Total Programs 21 36

Source: DWC and CHSWC staff as of 12/6/17

Car Carve-Outs: K e-Outs: Key Com y Components

• nents

The potential components of a carve-out are:

• Alternative dispute-resolution process.
• Agreed list of medical providers, qualified medical

evaluators, and agreed medical evaluators.

• Joint labor-management safety committee.
• Safe and early return-to-work programs offering a light

duty modified job or alternative job.

• Retraining programs that include an agreed list of

providers.

11

Advantages f ntages for the injured w r the injured work rker: er:

• Avoid unnecessary misunderstandings, disputes, and

litigation

• Ensure prompt, appropriate medical care
• Facilitate safe, prompt return-to-work and sustained

employment

• Support programs to prevent workplace injuries and illnesses
• Reduce delays encountered in the state system
• Increase satisfaction with delivery of workers’ comp benefits
• Improve job satisfaction and overall morale

12

Advantages f ntages for the em r the emplo ployer: er:

• Reduce workers’ compensation costs from:
• Improved medical care
• Unnecessary disputes, litigation and delays
• Enhanced prevention of injuries
• Improve productivity, morale among all employees

13

Car Carve-Outs: OCC and Non-OCC e-Outs: OCC and Non-OCC Int Integrat grated Medical Care ed Medical Care

Carve-outs offer an opportunity to negotiate integration between occupational and non-occupational medical treatment:

• Agreed list of medical providers
• Can negotiate dispute resolution process to be

consistent with group health

14

Car Carve-Outs: A e-Outs: Advantages t ntages to OCC and Non-OCC Medical Care OCC and Non-OCC Medical Care

• Improved quality and coordination of care
• Elimination of duplication between group health and

workers’ compensation, i.e. diagnostic tests

• Same medical provider for occupational and non-
• ccupational treatment
• Improved access to care because there is no dispute
• ver coverage
• Fewer disputes (and delays) over treatment
• Reduction in administrative costs of two systems

15

Car Carve-Outs: e-Outs: Alt Alternativ rnative Disput e Dispute R e Resolution solution

The Alternative Dispute Resolution (ADR) process in a carve-out generally includes three (3) stages:

• Ombudsman: In the initial stage the ombudsman, a neutral third

party, can provide information to injured workers and attempt to avert or resolve disputes.

• Mediation: If dispute resolution is not successful in the first stage,

the process may move to a second stage, or mediation, in which a mediator, a neutral third party, assists in resolving the conflict.

• Arbitration: If dispute resolution is not successful in the second

stage, the dispute may move to the third stage, or arbitration. In this stage, both sides have an opportunity to present witnesses and evidence and to engage in cross-examination. If neither party is satisfied with the decision attained through arbitration, the employer or the employee may appeal to the WCAB Reconsideration Unit and, ultimately, to the State Court of Appeals.

16

17

Problem Ombudsperson No Problem Resolved by Ombudsperson No Resolution Mediation No Resolution Resolved by Mediation Arbitration Resolved by Arbitration Claim Closed Process Ends WCAB Appeals Board Superior Court  California Supreme Court No Resolution Injury Employer / Insurer / Ombudsperson Notified

Workers’ Com ers’ Compensation Claims Pr ensation Claims Process

• cess

Alt Alternativ rnative Disput e Dispute R e Resolution solution

The K The Key Par y Participants in a Car icipants in a Carve-out e-out Alt Alternativ rnative Disput e Dispute-R e-Resolution Pr solution Process:

• cess:

Roles and les and Responsibilities sponsibilities

• Ombudsmen

The key responsibilities include:

• To act as a neutral party to provide information

and resolve disputes.

• To maintain confidentiality.
• To strive for objectivity and impartiality in order to

consider the concerns of all parties known to be involved with the issue.

• To develop a range of options to resolve problems

and facilitate discussion

18

The K The Key Par y Participants in a Car icipants in a Carve-out e-out Alt Alternativ rnative Disput e Dispute-R e-Resolution Pr solution Process:

• cess:

Roles and les and Responsibilities (Cont’d.) sponsibilities (Cont’d.)

• Mediators

The key responsibilities include:

• To engage the parties in further informal

discussions if they cannot reach agreement after working with the ombudsman

• To facilitate self-determination:
• the mediation process relies upon the ability of

the parties to reach a voluntary, uncoerced agreement

• To maintain confidentiality

19

The K The Key Par y Participants in a Car icipants in a Carve-out e-out Alt Alternativ rnative Disput e Dispute-R e-Resolution Pr solution Process:

• cess:

Roles and les and Responsibilities (Cont’d.) sponsibilities (Cont’d.)

• Arbitrators

The key responsibilities include:

• To be knowledgeable in the workers’

compensation dispute process

• To appoint an authorized health care professional

to assist in the resolution of any medical issue

• To render a decision (award) within a specified

number of days from the completion of the proceedings

20

The Appeals Pr The Appeals Process in a Car

• cess in a Carve-out

e-out

• The Reconsideration Unit of the Workers’

Compensation Appeals Board (WCAB):

• If neither party is satisfied with the decision of

an arbitrator, then the workers of the employer may appeal to the Reconsideration Unit of the WCAB to review the decision.

• Not allowed to reweigh the evidence. Only can

consider whether the arbitrator made a mistake in the decision-making process.

21

The Appeals Pr The Appeals Process in a Car

• cess in a Carve-

e-

• ut (Cont’d.)
• ut (Cont’d.)
• If neither party is satisfied with the decision of

the Workers’ Compensation Appeals Board (WCAB), then the worker or the employer may appeal to the state court of appeals. 22

For more inf r more information… rmation…

• Carve-Out page on DWC website

http://www.dir.ca.gov/dwc/carveout.html

• How To Create a Workers’ Compensation

Carve-Out in California: Practical Advice for Unions and Employers http://www.dir.ca.gov/CHSWC/carve-out1.pdf 23