Assembly Standing Committee on Insurance

Good morning, Vice Chair, Members of the Committee. Welcome to the Assembly Committee on Insurance. We're going to start as a Subcommitee today until we get more Members. Today we will consider eight bills. Three bills are proposed consent and these bills are file item three, AB 1125. File item five, AB 1293 and file item eight, AB 1398. So we're going to begin with Assemblywoman Ortega, whenever you're ready to present, start with AB815, please.

It Good morning, Madam Chair and Members. Thank you for the opportunity to present AB815. AB815 would ensure that social service workers are not misclassified as commercial or for hire drivers under personal auto insurance policies.

Social service workers who use their personal vehicles while caring for an individual with mental, physical and behavioral health conditions are being misclassified by their auto insurance companies as drivers of commercial or for hire vehicles.

Being classified as a commercial driver means much higher premiums that are unaffordable for support service workers who are already overworked and paid minimum wage.

This leads to workers having to either cancel their auto insurance coverage, forego their use of their car for up to 18 months while fighting a claim, turn down clients in dire need of services, or leave the industry altogether. The situation puts additional pressure on an already strained system of service delivery.

According to recent published report, the Department of Developmental Services is experiencing severe workforce shortage that is hindering their ability to assist over 458,000 individuals with IDD. California has committed itself to providing all people with developmental disabilities the services and supports they need to live independent and normal lives.

Testifying with me today in support is Miriam Burke and Emmalynn Chaubard, Government Affairs Director for the California Disability Service Association.

Good morning. Thank you for allowing us to be here. My name is Miriam Padilla Burke and I work as Director of programs for Options for All for a nonprofit serving clients with intellectual and developmental disabilities. We operate in San Diego, Northern California, Inland Empire.

We have over 1800 clients that we provide service to and over 400 direct service professionals, DSPs as part of. So we have a wide variety of services that allow our clients to integrate into the community and become participating Members. Right. Active Members.

An integral part of what we do, the work we do is our staff pick up clients from the home and take them out to many places. Work could be volunteer sites, for the most part, school, whatever they choose to do, medical appointments. And so this is such an essential component of the supports that we provide.

I feel that we in this field where it's so difficult to find staff who are qualified are willing to accept the wages that we offer. And on top of it, the financial strain that some are facing with having to increase the premium that they're being asked to pay for insurance.

So they're being required to pay for commercial auto insurance, which is putting an undue financial strain. We have DSPs who are leaving the being forced to leave the field altogether. We have some who have gotten in vehicle accidents with their clients and the insurance is denying their claims.

We have others who have lost their vehicles and as a result we are very concerned that already we have a shortage and this is just putting an undue financial strain. So I respectfully urge all of you to please support this and help us to support our direct service professionals who provide services to our most vulnerable citizens.

Thank you.

Good morning Chairs and Members of the Committee. My name is Emmalynn Chaubard and I'm Government Affairs Director for California Disability Services Association. We represent 120 service providers across the state who support individuals with intellectual and developmental disabilities. Many workers felt uncomfortable testifying publicly today because of the risks associated with this Bill.

So today I'll be sharing the testimony of Delia. Delia is a direct support professional who provides services to individuals in day programs and residential facilities. Delia has been supporting those with disabilities in California through two different state funded programs for the last 10 years. My current role involves helping participants access their communities and achieve their personal goals.

For both of my jobs, I use my car for a small portion of the day to go to different places. Earlier this year, on a regular day with my participant, I had a small accident while in the community. Luckily no one was hurt, there was no serious damage and the other driver was very understanding.

I contacted my car insurance company to report the accident and start a claim. After answering several questions, they informed me that my coverage was denied because I was using my car for commercial purposes. I always pay my insurance and I had no idea that they would deny my claim. This was emotionally and financially stressful for me.

The individuals I support do not have the means to use public transportation and rely on me to access their communities. To protect this, we're asking that legislators clarify the status of social service workers in the eyes of the insurance industry.

We're not delivering goods or drivers for hire, we're caregivers, using our vehicles to support participants in living their fullest lives. Unfortunately, stories like DALIA are becoming much more common. AB815 offers a simple fixed clarifies that these workers are not commercial drivers under the law, which would help prevent wrongful insurance denials. And protect access to essential services. For these reasons, we respectfully ask for an aye vote.

Thank you. Do we have any additional support in the room?

Good morning, Madam Chair and Members. Carly Stelzer on behalf of the California Behavioral Health Association. Proud co sponsors in support. Thank you.

Chair and Members. Alicia Priego on behalf of California Mentor in support.

Good morning. Roxy Ortiz with the Association of Regional Center agencies representing California's 21 Regional Centers providing services and supports for individuals with intellectual and developmental disabilities. Thank you and support.

Thank you. Do we have any lead witnesses in opposition? Say none. Okay. Do we? I'll bring it back to the Committee for questions. Seeing none. Would you like to close Assembly Woman?

I respectfully ask for an aye vote when the time is appropriate.

Okay, we'll hold that open.

Thank you. Thank you.

Whenever you're ready, you can present AB 1329.

Thank you, Madam Chair and Members, for the opportunity to present AB 1329. Today, AB 1329 makes the necessary reforms to the Subsequent Injury Benefit Trust Fund. That is a mouthful, which is a very long name that does not adequately describe this program's importance.

The Fund was first created after World War II to help injured soldiers reenter the work phase workforce. Because someone who has a disabling injury is more prone to a subsequent injury, the employers are held responsible for injuries acquired on the job. Employers after World War II were less likely to hire injured veterans.

The Fund was created to spread the risk so patriotic employers didn't carry the burden of workers comp for any subsequent injuries. It has since been expanded to apply to all disabled workers. Currently, every employer in the state contributes less than $0.02 per $100 in insurance premiums in the Fund.

The Fund then carries the risk and obligations for any subsequent injuries to disabled workers. AB 1329 makes a series of thoughtful changes that will reduce litigation costs, reduce medical legal costs, and reduce the number of 100% disability cases.

The cumulative impact will reduce employer assessments by 20 to 25% while maintaining the lessened financial risk to employers who give previously disabled workers a second chance. The witness I have today with me today is Jason Marcus, representing the California Applicants Attorneys.

Good morning, Madam Chair, Committee Members. As she said, Jason Marcus. I'm the Legislative Chair for the California Applicants Attorneys Association, or cah, as we call ourselves. We're a group of about a thousand attorneys throughout the State of California that represent injured workers.

And collectively, our group represents more women, union Members and immigrants than any other group in the state. I want to thank Assemblymember Ortega for bringing this Bill forward to protect the Fund and help reduce costs for employers.

AB 1329 will lower the assessments paid by all employers into the Subsequent Injuries Benefits Trust Fund by approximately 20 to 25% while continuing to reduce the financial risk to employers who take a chance on hiring a previously disabled worker.

Subsequent Injuries Fund claims are handled differently from other workers compensation claims in the state, and several of those differences have resulted in outcomes that are unnecessarily more financially burdensome than as identified by a 2024 study by the RAND Corporation, which was conducted at the request of the Department of Industrial Relations.

There were a few things that that study identified. First, the use of qualified medical evaluators, I.e. medical legal evaluations, has no limit in Subsequent Injuries Fund cases. Second, permanent disability is not defined in statute, consistent with the changes made in the 2004 and 2012 reforms.

And three, the standards for determining eligibility for benefits from the Fund are not well defined in statute. AB 1329 makes changes by aligning the medical legal process, the QME process, in Fund cases with existing law that is the law that applies to all other workers compensation claims.

It adds a clear definition for standards of eligibility for the Fund and makes changes to the definition of permanent disability, consistent with those 2002 and 2012 reforms. The cumulative impact of those changes will reduce employer assessments by 20 to 25% and will continue to protect employers who take a chance on hiring those previously disabled workers. Happy to answer any questions and we respectfully request an aye vote.

Thank you. We're going to take a quick pause to establish quorum. Secretary, please call the roll.

[Roll Call]

Okay, thank you. Do we have any additional witnesses and support in the room? Okay. Do we have any lead. Lead opposition to this Bill? Please come.

Good morning, Madam Chair and Members. Jason Schmelzer here today on behalf of the California Coalition on Workers Compensation. We are respectfully opposed to the Bill in print, but we are preparing amendments that we're going to submit to the author and the sponsor that we think will remove our opposition.

I want to just note at the beginning we appreciate the goal of reducing assessments by 20-25%. And I think we've had positive conversations on prior bills in the past with both the author and the sponsor. And we're looking forward, forward to having Those conversations here. Want to flag a few things.

SIBTF obviously has a long and proud history. The Member did a good job of describing that. But costs have exploded pretty significantly. Significantly over the past 10 years. Total payments have grown from 13.6 million in 2010 to 232 million in 2020. 2022.

Obviously, that's broken up between the two main categories of payments, the benefits and the administrative costs. I think we appreciate the discussions on. On both our amendments will do two things I'll flag for you.

One, I think what we would propose to do is remove questions of sort of eligibility in the Fund and have those in the broader context of permanent disability adequacy. And then second, I think we're going to focus on some adjustments to the QME portion of the Bill.

But again, look forward to having that conversation and hope to get to a good place here on this Bill. And thank you for your time.

Thank you. Additional opposition in the room. Please come forward.

Faith Borges. On behalf of the California Association of Joint Powers Authorities, we'd align ourselves with the comments made by Mr. Schmelzer and look forward to continuing this work in progress.

Mark Sektnan and American Property Casual Insurance Association were also oppose unless admitted. Thank you.

Chairmember Stephanie Roberson, on behalf of the Chamber of Commerce, also opposed unless amended. Thank you.

Thank you. Okay, I'm going to bring it back to the Committee. Do we have any questions for the author? Okay. Do we have a motion? Second. Thank you. Thank you. Would you like to close Assembly?

I respectfully asked for an aye vote. And I also want to acknowledge our former Assembly Member Alberto Torico, who is here representing the California Applicants Association.

Thank you, Secretary. Please call the roll.

[Roll call]

Okay, we're going to put that on call and I'm going to go back to file. Item number one, AB815. I just need a motion and a second on AB815. Thank you. Secretary call the roll.

[Roll Call]

Okay, that Bill is out. Can I. We're going to go to the consent calendar. Do we have a motion? And second. Thank you, Secretary. Please call the roll.

[Roll Call]

That Bill is out. Assemblyman Chen, Would you like to present AB 1048? Whenever you're ready

Thank you, Madam Chair, for allowing me to present my Bill. Before I begin, I want to thank the Committee for their Hard work on this Bill. Working so closely with my staff. Really appreciate that, and to meet with us with such a busy season coming along.

I'm here to present AB 1048, a straightforward but important Bill that addresses a growing challenge in California's workers compensation system. Unauthorized payment reductions for medical providers who treat injured workers.

Currently, many providers are seeing their reimbursements reduced, not because they agree to it, but because a third party entity or silent network arrangements that apply discounts without the provider's knowledge or consent. These reductions often fall well below the official fee schedule and in some cases, even below Medicare rates.

Unfortunately, current law does not specifically allow providers to dispute these reductions through the Independent Bill Review, or better known as the IBR process, a process created to resolve billing disputes between medical providers and claim administrators. As a result, providers have little to no recourse when their payments are unfairly reduced.

This issue truly has real consequences that we do not prepare for. In San Diego, for example, an orthopedic surgeon performed a carpal tunnel procedure with an expected reimbursement of $672.50. Instead, she received just $548.54, an unexplained discount she never agreed to.

She's now the only physician in her four Doctor practice still treating injured workers that may not be sustainable for much longer. AB1048 addresses this problem by clarifying that payment disputes involve unauthorized or contract based discounts are eligible for review through the IBR process. This clarification would give providers a formal and fair path to resolve reimbursement concerns.

Opponents have expressed concerns about whether the IBR process is equipped to handle this type of review and how it could potentially impact existing arbitration agreements. To be clear, AB 1048 does not require the IBR review every contract. It is simply clarifies that disputed payment reductions can be reviewed through the existing IBR process.

The Bill also does not modify or nullify existing arbitration provisions. AB 1048 is a reasonable target solution that strengthens existing processes and supports both providers and patients. I respectfully ask for ayevote here to testify on our behalf is Dr. Basil Besh to answer any additional questions, Diane Przybowski

Good morning Madam Chair and Members and thank you for giving me the opportunity to address you all. Current law already exists that there needs to be transparency.

If I sign a contract agreeing to a discount and I'm discounted and I say well that's not matching the contract I have or I don't recall signing a contract like that. Show me the contract. IBR is already a robust, efficient way to adjudicate this process.

It's already been successful in adjudicating other billing disputes and this is basically just a common sense Bill in order to use existing infrastructure to accomplish that goal. This is not for contract dispute. This is for transparency. Show me the contract that I signed.

If I signed it then I'll have the option in the future of canceling that contract. We have concrete examples where an orthopedic group in Southern California canceled a Multiplan contract five years earlier, they were continuing to get discounted. They leaned on the law. 4609 said, show me the contract you're using to justify this discount. Five years.

This went on until the California Orthopedic Association had to be the one to ask for this contract through our contacts. Turns out they were underpaid by half $1.0 million. So imagine a small group of three or four doctors over this time saying we, we canceled this contract long ago and you're still discounting us.

Same group now after this corrected is getting discounted at 15%. They say we don't recall at all signing a contract like that. Can you show us the contract asking over and over and over again until California Earth Peak Association steps in and says zero it's an 8% discount, not 15%.

This is not being used to dispute a contract, only to have transparency on it. Let me see what you're using to justify the discount and then I'll be able to do with it what I need to do with it. So these examples are concrete and already happening. A very efficient mechanism already exists.

And we respectfully ask of this Committee an aye vote so that we can use the existing infrastructure to adjudicate these disputes. Thank you.

Diane Przepiorski. I'm the Executive Director of the California Orthopedic Association. COA represents about 70% of all orthopedic surgeons throughout the state. Unfortunately, many of our Members have already left the workers comp system just because it's just too big of a hassle to just try to get paid for.

They already go through an extensive prior authorization process to have their services approved. And then when they go to Bill, they have all these PPO discounts, silent PPO discounts being applied in the background. It does take COA to actually get involved. Groups that Dr.

Besh mentioned had been trying to get copies of the contract and resolve the disputes for over a year. I will add that four months now that COA has been involved the plan. The carrier has only reprocessed a small number of the disputed bills. So it's a continual battle. And most recently, as again

Dr. Besh mentioned, they're claiming now they're entitled to a 15% discount. But the ironic part about it is when they actually sent the contract that they're relying on, it only allowed for an 8% discount. So here again, the group was being hit with almost a double discount on their bills. And it's just driving providers out of the system.

So all we're really asking to do is to use the existing IBR system to be able to have a disinterested third party resolve these disputes respectfully ask for an aye vote. Thank you.

Thank you. Do we have any additional support in the room? Please come forward.

Thank you. Madam Chair and Members, my name is Don Shinsky. I'm here on behalf of the Western Occupational Environmental Medical Association. We are the regional component of American College of Occupational Medicine.

We are occupational physicians that work up and down in the work comp system, not just as Clinicians, but also for companies and carriers and in UR and qme. We support this as a needed transparency measure. Appreciate your aye vote.

Good morning. Angela Hill, on behalf of the California Medical Association and support.

Thank you. Do we have any lead opposition?

Thank you, Madam Chair and Members. Jason Schmelzer here on behalf of the California Coalition on Workers Compensation. Again, just want to say very much appreciate the conversations with the sponsor and the author. We've been sort of talking through a variety of issues over the past several months, and frankly, we look forward to continuing the conversation.

I would just sort of flag. This Bill isn't necessarily about contract clarity. It's about dispute resolution. So our objections are based on the dispute resolution method being deployed. We're happy to have a conversation about contract clarity, but that is sort of a separate subject here.

I want to sort of separate out the problem and the proposed solution here. With respect to the problem, I think it's important to understand that workers compensation, like every other complex medical benefit delivery system, is complex and it has a lot of problems for everybody involved. On the billing side, our Members face a lot of challenges.

For example, the statutes and regulations dictate the cost for various services, but providers don't Bill at that cost. They Bill above that cost for a variety of different reasons. We then have to go back and figure out what, based on the law and based on contracts that have been signed, should actually be the amount.

It's sort of like paying your taxes. You have to figure it out and then submit it. And if we get it wrong, there's penalties and there's dispute resolution processes there. So it's difficult for. For us as well.

Much like every other medical delivery system, there's a series of sometimes overlapping PPO contracts, But they exist for a reason, and there's a reason doctors sign them, and there's a reason that we deploy them. If there. Again, if there's a need for sort of addressing clarity in those contexts, we're happy to have that conversation.

But with that, I'd get to the solution. What they're proposing to you to do is use the independent Bill review system for this purpose. My understanding as of now is that IBR will apply a contract if there is no dispute about whether or not the contract applies.

So they can basically read it and say this is how it applies to the fee schedule. What they do not do is adjudicate the applicability of that contract. And I think the reason is that that's a legal question. This is a service being provided by a third party for a fee, and this is a legal question.

And if you don't have lawyers and judges that are answering that question, there are issues there. So we sort of question the ability of the IVR process to be adapted specifically for this purpose.

And then the other point that I'll make is that many of These contracts have independent dispute resolution processes in them, arbitration, venue selection, et cetera. And we think we should defer to those dispute resolution processes.

With all of that being said, I think we look forward to continuing the conversation with the author and the sponsor, and we'll leave it at that. Thank you very much.

Faith Borges. On behalf of the California Association of Joint Powers Authorities, we'd align ourselves with the comments of Mr. Schmaltzer very much in support of transparency in that effort, but have strong concerns about adding it to this system that would increase delays in a system intended to provide care to injured workers. Thank you.

Mark Sektnan American Property Casualty Insurance Association. Respectful opposition.

Stephanie Roberson, representing the Chamber of Commerce, also in opposition.

Thank you. Okay, I'm going to bring it back to the Committee. Do you have any questions for the author? Thank you. Assemblymember Chen. Would you like to close?

I respectfully ask for your aye vote.

Okay. Secretary, please call the roll.

[Roll Call]

Okay, that bill's out. We'll hold it open.

Thank you, Madam Chair.

You're welcome. Assemblywoman Rodriguez, would you like to present AB 1236? Whenever you're ready.

Good morning and thank you, Chair and Committee Members. I am proud to present AB 1236, a measure that would create the Climate and Sustainability. Sustainability Insurance and Risk Reduction Grant Program under the Department of Insurance. California has faced and will continue to face threats of wildfire, heat waves, flooding and sea level rise.

Insurance plays a critical role in the recovery of our communities following climate disasters. But the reality is many households and small businesses do not have sufficient coverage to Fund repairs and rebuilding efforts. For example, roughly half of California households rent their home. Renters insurance is far less common than homeowners insurance.

Renters are at risk of losing their possessions and not being able to rebuild their lives after a wildfire or flood or other climate intensified events. Low income communities and historically marginalized communities will bear a disproportionate burden.

The devastation of the Los Angeles fires in January is a recent example of the burdens our communities face as they recover and they rebuild their lives as after losing their homes.

The grant program under AB 1236 will Fund insurance projects that will provide tools and incentives for residents, small businesses and communities to reduce risks before the next catastrophe and to rebuild stronger after climate disasters. Furthermore, this grant program aligns with a recommendation from the 2021 Climate Insurance Report.

The recommendation before you focuses on protection of areas with low insurance uptake and high risk, increasing both local, community and statewide resilience. Speaking in support of AB 1236 is Josephine Figueroa, Legislative Director and Deputy Commissioner for Department of Insurance's Policy and Legislation Branch, and Michael Peterson, Deputy Commissioner of the Department's Branch of Climate and Sustainability.

Good morning, Madam Chair and Members of the Committee. Josephine Figueroa, Deputy Commissioner and Legislative Director for the Department of Insurance Insurance Commissionado, is a proud sponsor of AB 1236. I'd first like to thank Assemblymember Rodriguez for authoring this very important measure.

AB 1236 would bolster community resilience by establishing the Climate and Sustainability Insurance and Risk Reduction Program at the Department of Insurance. Pilot projects would explore innovative approaches to insurance that build upon economic resilience, with particular focus on communities that experience extreme heat, wildfire risk, flooding or biodiversity loss where insurance uptake is low.

In recent years, California has experienced record setting heat waves, wildfires, atmospheric rivers flooding events brought upon by climate change. Insurance plays a critical role in the recovery from climate disasters, but many households and small businesses do not have sufficient coverage to Fund repairs and to rebuild.

Without greater focus on risk reduction and improved tools for resilience, communities are likely to face escalating risk leading to increased losses, lingering financial impacts and less resilience to future climate intensified events.

AB 1236 would implement key recommendations of the Climate Insurance Report, a first of its kind report put together by Insurance Commissioner Lara's California Climate Insurance Working Group. The report prioritizes closing protection gaps by focusing on the protection of areas with low insurance uptake and high risk, thereby increase local and statewide resilience.

Woven throughout the report are recommendations to establish pilot projects that use innovative insurance mechanisms including community based insurance, parametric insurance and nature based solutions to reduce risks and increase protections from climate change.

AB 1236 pilot projects would focus on the development of proof of concepts that expand insurance options and integrate nature based solutions, especially in vulnerable and disadvantaged communities. Over the past year, the Commission has successfully initiated several other pilot projects with public and private support that address insurance gaps in communities facing flooding, sea rise and wildfire.

These pilot projects are exploring the use of innovative insurance approaches such as paramedic insurance. AB 1236 built will build upon the Commissioner's ongoing efforts to implement creative and sustainable strategies that combat climate change while bolstering economic resilience on our most vulnerable populations. On behalf of Insurance Commissioner Ricardo Lara, I ask for your aye vote. Thank you.

Any additional support in the room.

My apologies. With me today is Michael Peterson, Senior Deputy Commissioner on Climate and Sustainability here for the Department of Insurance to answer any technical questions you may have. Thank you.

Thank you.

Michael Jarred with the Nature Conservancy and support. And I've also been asked to do a support for the Environmental Defense Fund. Thank you.

Good morning. Maria Flores here on behalf of inclusive action for the city and support.

Good morning Allison Adey on behalf of the Personal Insurance Federation of California in support.

Good morning Chair and Members Naomi Padron on behalf of the Pacific Association of Domestic Insurance Companies in support.

Mark Seknan with American Property Casualty Insurance Association in support.

Thank you. Do we have any opposition lead opposition to this Bill? Okay, I'll bring bring it back to the Committee for questions. Assemblymember Harabedian thank you.

Madam Chair wanted to thank the author for this Bill. It's very much needed in my district and in your district. Our constituents are going to benefit from it. So thank you for your leadership, your quick action. Please list me as a co author. I'm happy to support the Bill. Thank you to the insurance Commissioner as well for all the work on the Bill.

Assemblyman Gipson.

Thank you very much to the author of the Bill. Certainly would love to be a co author of the Bill and appreciate your leadership in this work and standing up the people not only your district but also State of California. This will, this is a game changer. So thank you very much.

Thank you. Okay. See, see no other questions. Would you like to close?

Sorry, I was looking for my button that I don't have. Just thank you again chair and Members for hearing this Bill today. AB 1236 is an opportunity for our Department of Insurance to identify projects to address availability and affordability of insurance, particularly for low income individuals in light of climate change.

I also just want to thank you for adding your co authorship and for your support of this Bill. We know especially because this is how we all started regular session was addressing the wildfires and compounding insurance crisis. So I just want to thank the Commissioner for being a co author of this and ask for your aye vote.

Okay, Secretary, please call the roll.

[Roll Call]

Congratulations. That bill's out. We'll leave the roll open. Assembly Woman Addis, would you like to present AB 1336? Whenever you're.

[Backgorund]

Well, thank you Madam Chair and Members. I also want to thank the staff and advocates here. Today I am presenting AB 1336, the farm worker Heat Illness Prevention act that will incentivize employers to comply with heat illness prevention standards, helping to prevent avoidable tragedies like heat related illnesses and deaths.

As we all know, California's farm workers are indispensable to our food supply chain, our state's economies, and most importantly, the communities that they call home. Unfortunately, extreme heat is becoming increasingly common, threatening the well being of this vulnerable community. In recent years, major agricultural areas in California have been experiencing record breaking heat waves.

For example, in 2022, King City, right near my district broke its hottest temperature ever recorded at 116 degrees and Napa set a record of 114 degrees. Extreme heat increases the likelihood of heat related injury and death and according to the California Department of Public Health, from 2000 to 2022 rates of occupational heat related illness more than doubled.

This problem is particularly acute for those who work outdoors, including farmworkers. Mortality from heat related illness is 20 times higher for farmworkers than private industry and non government workers. During the summer growing season, the average farm worker is exposed to 21 days that are unsafe due to heat.

The risks to farmworkers are only expected to grow due to climate change. Given these risks in California, employers are required to take steps to protect workers from heat illness and outdoor workplaces, including providing access to drinking water, shade and preventative cool down rests. Troublingly, many agricultural employers remain out of compliance with heat illness prevention standards.

In 2019, Cal OSHA conducted a study of more than 4,000 health related inspections and cited employers for non compliance in 47 of those inspections. And that wasn't a study. Excuse me. They conducted more than 4,000 inspections and there were issues in 47% of the inspections.

From 2018 to 2019, the number of suspected and confirmed farm worker heat related Deaths increased approximately 130%. So with over 60,000 farms in the state and given the current budget outlook, it would be impossible for Cal OSHA to enforce the state's heat regulations on every farm.

While employers are subject to penalties for violations of heat illness prevention standards, the ongoing prevalence of violation shows current enforcement protocols are not enough. Farm workers also face a climate of fear which is ever increasing when it comes to reporting workplace violations or injuries. Particularly given the intentional fear mongering and actions of the New Federal Administration.

AB 1336 will help prevent heat related illness and death among California's farm workers by incentivizing agricultural employers to comply with heat illness prevention standards. It does so by creating a rebuttal presumption that a heat related injury arose out of the course of employment when an agricultural employer fails to comply with the state's heat illness prevention.

With me today in support is United Farm Workers President Teresa Romero. And then we have Jason Marcus, workers compensation attorney for technical questions.

Good morning, Madam Chair and Committee Members. Teresa Romero President of the United Farm Workers in support. With increased fear and intimidation among immigrant workers, the need for this Bill has increased. I am before you again on this same Bill as last year. I have no choice as long as farm workers die from preventable causes.

Every farm worker who dies from outdoor heat has a name, Maria Isabel Vasquez Jimenez. She was 17 years old. Her life, a needless death, inspired change. In 2005, we worked with Governor Schwarzenegger to enact the first outdoor heat regulation in the United States. Cool drinking water, shade, rest breaks. Simple, decent, yet strongly opposed and weakly enforced.

As more farm workers died, we see the State of California twice. What we quickly discovered is that Cal OSHA's enforcement is limited because it is nearly impossible. And at end, no amount of money can monitor over 60,000 farms in the state for the basic standards in the outdoor heat regulation. This Bill encourages employer compliance.

It doesn't change the heat regulation. It doesn't add additional workers compensation benefits. If a farm worker suffers a heat illness injury or dead at work, if the farm worker proves that their employer was not in compliance, then the injury becomes eligible. Eligible for the rebuttable presumption under the Bill.

However, if the employer proves compliance, then this Bill doesn't apply. I want to repeat that. If the Bill. The Bill doesn't apply to employers who are in compliance with existing outdoor regulation. Climate change is making working outdoors in the heat extremely dangerous. Every employer should comply with the state's basic outdoor heat standards.

They work, they prevent farm workers heat illness, injury and death. Saving a life, even one is worthy of your ongoing consideration. Thank you.

Just technical support, just in case.

Is there any additional support in the room?

Good morning. My name is Maria Flores. I am a child of farm workers and I'm also the President for the College Assistant Migrant Program Organization of students in strong support.

Morning, Madam Chair. Members of the Committee, Yvonne Fernandez, California Labor Federation and support.

Good morning. My name is Yelisa Ambriz with the Central California Environmental Justice Network and the California Farm Worker Coalition in support.

Thank you. Is there Any lead opposition to this Bill, please come forward.

Thank you, Madam Chair and Members. Jason Schmelzer, here today on behalf of the California Coalition on Workers Compensation. I think first thing I want to say is that I completely agree with the sponsor that every employer should comply with the state's heat illness regulations.

I think the reason we're here today having a position on this Bill is because it's not about heat illness regulations. It's about the workers compensation system and the policy contained therein. These are separate and distinct systems. And from our perspective, the insurance policy needs to make sense.

From an insurance perspective, unfortunately, we think the Bill falls down on on those grounds. So the reason we're Opposed is that AB 1336, like its predecessor that was vetoed last year, seeks to use the workers compensation as a sort of weapon to encourage employers to comply with regulations which they should comply with.

We you can support the notion that employer compliance with heat illness is an unquestionable good without supporting workers compensation policy that is unquestionably bad. What we would ask the insurance Committee to do again is focus on the insurance policy, which falls down on several levels.

First, the Bill creates a statutory trigger for applying a legal presumption that heat illness is work related. But it provides almost no detail on how that question is supposed to be adjudicated. It's silent on who does it. Is it the Calicha Standards Board? Is it the Workers Compensation Appeals Board?

The WCAB does not have background on these issues. They would need training. It is also unclear when this decision would be made. And that's important because the Legislature passed legislation that essentially says if a presumption applies, you have less than 90 days to make a decision on the you have 75.

So when that question is answered, matters as a. As a issue for our complying with state law. It may sound like a minor detail, but decisions that are made untimely and not done reasonably subject our employers to $50,000 penalties also flagged by the analysis. The condition for the presumption applying indicates workplace causation.

It almost makes it unnecessary to have a presumption because it says a presumption applies if the heat illness injury resulted from the failure to comply. That proves the existence of a valid workers compensation claim and no presumption is necessary. So it just doesn't make sense from a workers compensation policy perspective.

Again, if this were a Bill on Calicha compliance or enforcement, I wouldn't be here. This is a question purely of insurance policy and its utility here. For those reasons, we urge no vote on the Bill but again support employer compliance with heedless regulations.

Okay, I'm going to bring it back to the Committee. Do we have. Oh, sorry. Additional opposition in the room.

Mark Sektnan with the American Property Casualty Insurance Association. I'd like to associate myself with Mr. Schmelzer's comments.

Gail Delihant with Western Growers Association. Our Members grow fresh produce in California and we are also opposed.

Thank you. Okay, now I'll bring it back to the Committee. Do we have any questions or comments for.

I have one question. So it's my understanding that this, that the Bill. So first of all to witness. Thank you very much. In elevating the story about the 17 year old young girl passing away due to the heat.

But while people are working in the fields, they're working for an employer and if they suffer a heat stroke or something like that, wouldn't that not fall under the workman's comp because they're working.

May I respond and Assembly Member. I apologize for not looking at you as I talk. It could so it could fall under the workers compensation system. But the worker has the burden of proving that their injury was caused by their job. And in some cases that may be quite self evident.

In other cases it may be far more challenging. There are certain conditions that the medicine simply isn't clear all the time on what caused a condition.

And so what this Bill will do is if a worker suffers a heat injury such as heat stroke or something else and shows that their employer was not in compliance with the applicable OSHA heat safety regulations, there would be a legal determination that their injury arose out of or was caused by the job rather than them having to go through the process of medically proving it, which in some cases can be proved and in other cases would present quite a challenge for that worker.

Thank you very. Thank you very much. Appreciate it. Move the Bill.

Secretary, please call. oh, would you like to close?

I'll respectfully ask for your aye vote.

Mr. Alvarez has a comment question.

Thank you. I have questions and more than questions, concerns on the lack of enforcement we have and we approve a lot of laws here to protect workers which make all the sense in the world. But I was concerned about the comment made by the testimony on how Cal.

OSHA doesn't essentially do its job, which is what we expect when we pass laws to protect people. So I want to maybe hear a little bit more about that limitation.

And the phrase that was used was there's not enough money out there to do the enforcement, that's a little concerning because I think at least myself coming here, we try to write laws to do good for people, and if those laws are not actually being implemented in that way to do good, then what's the point of the laws?

Can you help illuminate that a little bit more? I would appreciate that.

Like I said, we have approximately 60,000 farms in the State of California. Cal OSHA doesn't have the manpower to really go to every single farm and ensure that these heat illness protections are being enforced. We're looking for an opportunity to do it in a different way that will definitely save lives, save farm workers lives.

So then would you say that it's not just heat related workplace issues, but essentially all workplace related issues in a farm run the same risk that we don't have enough enforcement to protect people?

Probably, yes. If Cal OSHA doesn't have the manpower to visit 60,000 farms, whatever issues they are are not being brought up to their attention unless somebody files directly a claim.

Appreciate your testimony. Thank you.

Thank you, Assembly Member Ortega.

To answer Assembly Member Alvarez's question, Unfortunately, OSHA is not doing their job currently. In fact, I had a hearing last year to talk about this issue specifically. And many of those questions that you just asked were also asked on my behalf. And in fact, it was so egregious. That I requested an audit of the.

OSHA Department to see what's happening. Because you're absolutely right. What's the point of having a Department to enforce the laws that we pass in this Legislature if they're not being enforced? And so I'm waiting on that audit and hopefully we'll have it by the end of the year.

Thank you.

Thank you, Assembly Member Ellis.

I appreciate what you're doing here. As a farmer that has contract labor, the issue is bigger than this. The issue has to go with when we as a farmer, we hire a farm labor contractor to come into our field. And we have obligations, obviously.

And the reason we hire farm contractors, farm labor contractors, we want to be held from some of the liability that could occur. Now, we still are liable, but what happens is the farm labor contractor who has. He might have 500 employees, he might have 8,000 employees, and.

And he is the one responsible for the legality of his employees. Most farmers in the State of California subcontract to farm labor contractors and who may or may not have illegal working with them. And therefore the illegals are sometimes scared to bring these issues up. So.

Madam Chair, may I?

Yeah, please.

I just. I understand the passion of the Assembly Member, in talking about this issue, could I just ask that we speak respectfully about the folks that we're talking about. The respectful term would be undocumented people.

My apologies. My sincere

Would you mind. Would you mind? Assemblymember? Yes. Okay. Undocumented.

Undocumented. Yes.

My apologies.

Thank you.

And mixed legal status.

Okay.

Okay. Couple terms.

My apologies.

All right. Thank you.

So. But in that respect, I would tell you that it does the responsibility lies on the farm labor contractor. And I just think that's a bigger issue. So thank you.

Thank you. Any other questions or comments from the Committee? Assemblywoman Krell

I appreciate the author bringing this Bill. I think it's important because clearly we have an enforcement gap. We also have a reporting gap. And what this Bill does is sort of automate the process by creating this presumption. So if a farmer is in compliance, there's really no issue here.

This law won't be utilized at all. It's just for those kind of exceptional circumstances when a tragedy does occur and the person responsible isn't in compliance. So I think that makes sense. Also, the opposition mentioned something about this Committee focusing on the insurance aspects of it and there not being a way to monitor the workers compensation.

So I was just noting that the Bill also includes a division of workers compensation and the WCAB within the Department of Industrial Relations. So I think we would have that vehicle there in order to monitor the situation in terms of how the workers compensation would be distributed if there's a noncompliance and an injury.

Thank you. Assemblywoman Faris

I just want to thank the author for bringing this critical discussion forward. Very supportive of it. But I think it just really echoes the importance that we have multiple discussions to address our undocumented essential workers throughout the State of California.

And discussions are happening in so many different silos, but yet there's people trying to oppose a centralized discussion to address these issues that you are bringing forward to light. And you are embodying the very example of how all these discussions are happening in so many spaces, but yet the lack of leadership is not there to centralize it.

So we can thoughtfully address these critical issues impacting our community Members who are so marginalized and don't have a voice but us. So thank you for bringing this forward.

Okay. Would you like to close?

I do want to just thank the Committee for your thoughtful questions and thoughtful comments. I know there's a lot of feelings in the room about this. I would say at its crux is that we're in the midst of a climate crisis, that workers who work outside are some of the people that are most at risk.

When you think about what it's like to do hard labor, which farmworking hard labor in 116 degree heat or 112 degree heat, that it's our obligation to help smooth the process for folks so that if they are injured or at risk of death, that they can get some compensation and that they can, and that the law will be on their side.

And I think that's what most of us came to this Legislature to do. And so I just. I want to thank folks for their thoughtfulness on this issue and respectfully ask for your aye vote.

Thank you for bringing this Bill forward. Secretary, please call the roll.

[Roll Call]

Okay, that bill gets out.

Okay, we're gonna go back and open the roll on some of the bills. Whenever you're ready.

[Roll Call]

We're going to hold the roll open for five minutes for Members to come and vote.

[Roll Call]

Assembly Insurance Committee is adjourned.