RAND Report on the RTW Supplement Program

By Julius Young

RAND has now delivered to CHSWC a draft report on the California Return to Work Supplement Program. The report (see the bottom of this post) on the RTWSP has now been uploaded to the CHSWC website, with public comments due by May 7, 2018. RAND’s Michael Dworsky presented slides and a summary of the draft report at the April 5, 2018 CHSWC meeting. The RTWSP is commonly referred to by some in the industry as the $120 million fund. It was established during the 2012 negotiations regarding SB 863 and is intended to provide some extra compensation to workers with disproportionately high earnings losses. The fund is administered by the DIR, not by the claims administrator. Labor-side CHSWC commissioners praised the benefit at the recent meeting, noting that workers who can not return to their customary work often have trouble paying their bills and this program helps. RAND was commissioned to look at ways to distribute the fund monies, and the DIR followed RAND’s suggestion, eventually settling on providing $5,000 payments to workers who applied for the RTWSP after having been provided a return to work voucher (SJDB) by the claims administrator. In 2016, former State Senator Tony Mendoza requested CHSWC to advise on whether there was a gap between the numbers receiving a SJDB and the numbers applying for the RTWSP benefit. The answer received by Mendoza was yes, there was a gap, although the gap appeared to be narrowing. The RTWSP went into effect in 2015 but can apply to eligible workers injured after January 1, 2013. The RTWSP has never paid out anywhere near $120 million. This has led to multiple concerns. How can participation be boosted? Should the fund pay out more that $5,000 to eligible workers? Should payments be made automatically? Is the fund achieving its goals? Is the fund required to disburse $120 million each year or if not so required, should it do so? In 2015 an opinion by the California Legislative Counsel said that the way the current law is written, the DIR likely is not required to pay out the full $120 million in any given year and unused monies do not roll over into the next year. In 2017 a bill (AB 553) was introduced by Assemblyman Tom Daly to require that the full $120 million be paid out each year. The bill did not advance in 2017, but rather became a “two year bill”. It has not yet seen action in 2018. In March 2017 CHSWC commissioned a further study of the program. I suppose I should disclose that I was one of the stakeholders who was interviewed for the RAND study. As Dworsky indicated in his presentation, RAND finds that the RTSWP is targeting the intended population, is being administered efficiently, and is not plagued by fraud or abuse. What is falling short is the uptake by eligible workers. Dworsky noted that the data is incomplete, but in their sample only about half of SJDB voucher recipients were applying for the RTWSP. Workers with attorneys are the most likely to use the RTSWP.

RAND identified two options to increase uptake of the benefit. One would be to make payment of the RTWSP automatic upon issuance of a SJDB voucher. The other would be to make better efforts to increase notification and awareness of the RTWSP. RAND is not recommending increasing the benefit beyond the current $5,000 level, though Dworksy noted that the issue of whether $120 million must be paid out each year is an issue for lawyers to hash out. The most significant result of the April CHSWC meeting was the resolution passed by CHSWC commissioners to request the DWC to advise on ways to increase uptake of the voucher administratively. In 2017, Governor Brown’s Department of Finance opposed AB 553, the Daly bill, so even if the bill were to advance to passage this year, it is questionable whether the Governor would sign it. It seems more likely that we will see some sort of administrative effort to increase usage of the RTWSP. The DWC will likely report on their ideas either before or at the June CHSWC meeting, and in the meanwhile the public can weigh in. Here is a link to the draft RAND report which has been posted on the DWC website for comment:

The slides presented at the April 5, 2018 CHSWC meeting can be found here:

WorkersCompStudies$120MFund(RAND’sPowerpointToCHSWC)

And the CHSWC 2017 report to Senator Mendoza can be found here: http://www.dir.ca.gov/chswc/Reports/2017/Response-to-Bradford-and%20Report-on-RTW-Fund-Inquiry.pdf

Slides from the March 24, 2017 CHSWC meeting are here: WorkersCompReturnToWorkFund(CHSWCMarch2017)

Julius Young

© Copyright 2018 Julius Young. All rights reserved. Reprinted with permission.