The California JPIA Analyzes the Impacts of Senate Bill 1127 on Workers’ Compensation Claims

signing a documentGovernor Newsom recently signed Senate Bill 1127 (SB 1127) into law, despite the opposition of the California Joint Powers Insurance Authority (California JPIA) and employers throughout the state. The bill has several components that dramatically change how presumptive workers’ compensation claims are handled. These components are detailed below.

Temporary disability-cancer claims

THEN: Employees with a presumptive cancer claim were limited to 104 weeks of temporary disability benefits (which is consistent with most injuries).
NOW: Employees with a presumptive cancer claim are now entitled to up to 240 weeks of temporary disability if their injury has not reached maximum medical improvement before that time.

Discovery for presumption claims

THEN: Employers were afforded 90 days to investigate most workers’ compensation claims.
NOW: Employers will be allowed 75 days to investigate a claim. These claims often involve significant discovery, such as a deposition, retrieval of prior medical records, and a comprehensive med-legal evaluation, so it will often be impossible to complete discovery in this shortened timeframe.

Increased penalties
The potentially most concerning aspect of SB 1127 is establishing a new penalty for claims that are “unreasonably rejected.” These penalties would be set at “Five times the amount of the benefits unreasonably delayed” with a limit of $50,000 per claim. This bill provision will likely increase litigation as injured employees and their attorneys pursue these potential penalties.

Providing innovative risk management solutions for its public agency partners for more than 40 years, the California Joint Powers Insurance Authority (California JPIA) is one of the largest municipal self-insurance pools in the state, with more than 120 member cities and other governmental agencies. Members actively participate in shaping the organization to provide important coverage for their operations. The California JPIA provides innovative risk management solutions through a comprehensive portfolio of programs and services, including liability, workers’ compensation, pollution, property, and earthquake coverage, as well as extensive training and loss control services. For more information, please visit the California JPIA’s website at