UPDATE: ASSEMBLY COMMITTEE FAILS TO PASS SB 335 Bill Loses Support After Punitive Amendments to Key Provisions

July 15 2021

On July 13, 2021, the California Assembly Committee on Insurance held its first hearing on SB 335. The bill was amended significantly by the committee, but ultimately failed to garner enough votes to pass, with several committee members opposing the amended bill.

The amendments would maintain the current timeframes for making a liability decision – 45-days for presumptive injuries and 90-days for all other claims. During the delay period, the medical expense cap would remain at $10,000. Lastly, the Committee amended the proposed penalty language affecting presumptive claims. Instead of a penalty equaling 10% of the total award when the insurer unreasonably delays or refuses payment of compensation, the amended bill provides for a penalty of 25% of the unreasonably delayed benefits, up to $25,000. This change is more in line with how the statute currently reads, but with an increase in the cap from $10,000 to $25,000.

Discussion among the committee members focused on the size of the penalty being too punitive, and creating “incentive for litigation,” which they believed would likely result in simply in an increase in taxpayer expenditure. Other committee members felt the changes to timeframes and penalties were unnecessary, as very few presumptive claims are ever unreasonably delayed.

Ultimately, the discussions and amendments to the bill in committee signal that perhaps the legislature is not quite ready to approve massive changes to workers’ compensation decision timeframes and penalties, but we should be wary of further changes to come, as one committee member believes more reforms are likely to be negotiated in the very near future.

Please see our prior article: TIME IS OF THE ESSENCE: Proposed California Senate Bill Would Shorten Time to Deny All Claims to 45 or 30-Days