As a result of a new law passed in February 2002, workers' compensation benefits in California will increase for workplace injuries occurring on or after January 1, 2003. Providing these increased benefits will add to insurance claim costs, and will cause workers' compensation premiums to increase.

The premium on policies written in 2002 will increase 5.9% as of January 2003 to reflect the increased cost of these benefits, according to the Workers' Compensation Insurance Rating Bureau estimates. For policies written in 2003, costs will increase 9.7% just for the increase in benefits - these benefits are only a portion of the total increase in rates for policies effective January 1, 2003 or after. By 2006, when the law takes full effect, costs are projected to have increased by 17.8%. These preliminary estimates are subject to review by the State Insurance Commissioner.

The state law, Assembly Bill 749, increases benefits for California's injured workers for the first time in years. It provides for an increase in the following benefits for workplace injuries occurring on or after January 1, 2003:

• Maximum compensation for temporary disability will rise from $490 per week to $602 per week.

• Maximum compensation for permanent disability will rise from $140 per week to $180 per week.

To slow the escalating medical costs, the law:

• Limits the authority of the treating physician, unless a worker has predesignated a physician; and

• Requires prescriptions be filled with generic drugs unless the physician specifies a brand name.

To speed up injured workers' return to the job, the law:

• Allows employees to receive up to $10,000 in vocational rehabilitation benefits to be used in a self-directed plan; and

• Provides a state administered fund to encourage employers to quickly return injured workers to work.

Click here (www.wcirbonline.org) for a complete evaluation of Assembly Bill 749.