Workers’ Compensation: Subsequent injuries payments.

Assembly Member Ortega crafts a comprehensive update to California’s workers’ compensation framework for subsequent injuries, weaving a tighter alignment of permanent disability measurements with AMA Guides and establishing a new, centralized regime for special additional compensation paid through the Director of Industrial Relations as trustee of the Substantial Injuries Benefits Trust Fund.

The core changes introduce a two-part shift in how permanent disability is quantified and when additional compensation may accrue. First, when a prior disability and a subsequent compensable injury together yield a total disability of 70 percent or more, the worker may receive compensation for the remainder of the combined disability if either of two thresholds is met: the preceding disability affected a hand, arm, foot, leg, or eye and the subsequent impairment affects the corresponding opposite member with the subsequent injury alone constituting at least 5 percent of total disability, or the subsequent impairment alone constitutes at least 35 percent of total disability. Second, the measurement of permanent disability for these cases relies on AMA Guides, 5th Edition, with a timing-based approach: injuries occurring from 2005 through 2013 are measured by whole person impairment after adjusting for diminished future earning capacity (without regard to occupation or age), while injuries occurring in 2013 or later use whole person impairment multiplied by an adjustment factor of 1.4, again without regard to occupation or age. The bill states these provisions are declarative of existing law.

In parallel, the measure creates a new framework for special additional compensation (SAC) applicable to compensable subsequent injuries and shifts the payment channel from a private insurer to the state, administered by the DIR as trustee of the SIBTF. For SAC, the bill adds an evidentiary standard requiring substantial evidence that a prior permanent partial disability existed at the time of the subsequent injury and that it affected earnings or work capacity. It also enumerates a non-exhaustive list of conditions—such as certain digestive, metabolic, sleep, and sexual health issues—that shall not be treated as preexisting labor-disabling disabilities for eligibility purposes. The administration of SAC contemplates a regulated process: the Appeals Board fixes SAC amounts, and the DIR pays them as trustee of the fund, supported by a newly created evaluator infrastructure and regulatory authority to implement the program.

Implementation and administration are further shaped by a set of new operational provisions. Beginning with compensable subsequent injuries occurring on or after January 1, 2026, the SAC framework relies on substantial-evidence determinations, a database of qualified medical evaluators to perform SAC-related evaluations, and a framework permitting DIR to regulate the implementation. A five-year filing window runs for SAC applications after the injury date, or one year after the level of permanent disability is determined by the appeals board—whichever is later. To support the program’s administration, a revolving fund—with a statutory cap of fifty thousand dollars—facilitates early claim costs and adjustments, with expenditures exempt from certain procurement restrictions and reimbursed through accounting processes overseen by the Controller and Treasurer. The bill also authorizes DIR to contract for claims adjustment and legal representation, including potential arrangements with SCIF, subject to conflicts rules, and directs the creation of a regulatory apparatus to carry out these duties.

Taken together, the proposed changes reorganize SAC payments under state auspices, standardize impairment assessment via AMA Guides with timing-specific adjustments, and establish new governance, evidentiary, and administrative structures intended to improve the administration of subsequent injuries. The reforms place new emphasis on evidentiary standards for prior disabilities, create a formal evaluator network, and realign funding and payment responsibilities to the state, with a defined timeline for implementation beginning in 2026 and clear fiscal and regulatory prerequisites to be addressed in the ensuing budget and rulemaking processes.