Party Is Over on Workers' Comp Los Angeles Times (12.03.04) Registration Required
Ho Ho Ho, Merry Christmas! Ho Ho Ho!

To Nancy Behravesh, Gov. Arnold Schwarzenegger was a breath of fresh air. Behravesh operates a Santa Monica preschool called Les Enfants, and like a lot of business owners in California, her workers' compensation bills were killing her.

That's why she was more than happy to join Schwarzenegger's reform crusade early this year. She signed a petition supporting workers' comp relief, and when Schwarzenegger took his bows for getting a bill through the state Legislature, Behravesh was not forgotten.

Just last month, a large envelope arrived at Les Enfants. Inside was a certificate of appreciation from the Small Business Action Committee and a color photo of a smiling Gov. Schwarzenegger. The certificate thanked Les Enfants for teaming up with the governor "in ending the 'Small Business Killer' laws, rules and regulations..."

Behravesh was flattered.

Then she got another envelope. It contained her workers' comp bill, and the party was over.

The decrease she had banked on didn't come through.

In fact, her premium went up.

Way up.

"It went from $22,000 to $32,000," Behravesh says. "I've never had an increase like that."

When Behravesh mentioned the jump to other preschool operators, she found that she wasn't alone.

"Mine went up $21,000," says Ellen Khokha of Santa Monica's Growing Place.

Ho Ho Ho, Merry Christmas! Ho Ho Ho! And a lump of coal for you little girl...

Khokha discovered that her employees had been reclassified by her insurance company even though they performed the same jobs this year as they did in previous years. They went from early childhood educators to day–care workers, a switch that put them in a higher premium category.


"It's just part of the shenanigans the insurance companies are pulling," says Jamie Court of the Foundation for Taxpayer and Consumer Rights.

Insurance companies stand to save millions of dollars under the reforms, which placed strict limits on the claims of employees injured on the job. But the reform bill did not require the insurance companies to pass their savings on to clients.


You think it could have anything to do with the fact that Schwarzenegger — Mr. Campaign Finance Reform — has raised insurance industry money like an Olympic panhandling champion?

The governor's haul tops $1 million and counting, about half of which is from industry players involved in workers' compensation reform.

Insurance Commissioner John Garamendi has called for workers' comp premium reductions totaling 22% to match the savings by insurers, but the insurers are in the driver's seat. They don't have to listen to what he says.

Garamendi says insurers have dropped premiums by about 10% on average, with huge variations based on ambiguities and quirks, such as the reclassification of preschool workers and those in other industries.

"There's a widespread problem of changing classifications, the result of which is higher premiums with no real change in the risk," Garamendi said.

"Often it makes no sense whatsoever, and we are constantly dealing with this issue," he added, citing an example of an insurance company that classified secretaries as heavy equipment operators.

Ho Ho Ho, SUCKERS! Sing it with us kiddies: "Bait & Switch, Bait & Switch, Promise one thing and then stick it to the people, Bait & Switch!"

Ok, so we're not the singer/songwriters like some of our friends.

By the way, important fact of the day: Schwarzenegger has already raised $26 million dollars from "special intrest groups" and that is twice as much as Gray Davis had in the same period of time... and Schwarzenegger ran against him saying Davis was "beholden" to those same "special interests"! Hilarious!


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