Evaluation of the Return-to-Work Fund in California's Workers' Compensation System: Performance to Date and Options for Modification

Abstract

This document and trademark(s) contained herein are protected by law. This representation of RAND intellectual property is provided for noncommercial use only. Unauthorized posting of this publication online is prohibited. Permission is given to duplicate this document for personal use only, as long as it is unaltered and complete. Permission is required from RAND to reproduce, or reuse in another form, any of its research documents for commercial use. For information on reprint and linking permissions, please visit www.rand.org/pubs/permissions.The RAND Corporation is a research organization that develops solutions to public policy challenges to help make communities throughout the world safer and more secure, healthier and more prosperous. RAND is nonprofit, nonpartisan, and committed to the public interest.RAND's publications do not necessarily reflect the opinions of its research clients and sponsors.Support RAND Make a tax-deductible charitable contribution at www.rand.org/giving/contribute www.rand.org For more information on this publication, visit www.rand.org/t/RR2548Published by the RAND Corporation, Santa Monica, Calif. © Copyright 2018 State of California Department of Industrial RelationsR® is a registered trademark.iii Preface This report describes work undertaken by the RAND Corporation for the Department of Industrial Relations (DIR) to evaluate California's Return-to-Work (RTW) Fund as it approaches its third year of implementation. The main tasks of the mixed-methods evaluation are (1) to evaluate the adequacy and equity of the Return-to-Work Supplement Program that was created to implement the RTW Fund and (2) to identify any practices and policies that would improve the adequacy, equity, and efficiency of the Return-to-Work Supplement Program's administration.This research builds directly on a number of past RAND studies for DIR and the Commission on Health and Safety and Workers' Compensation. Most immediately, a 2014 RAND study (Seth A. Seabury and Ethan Scherer, Identifying Permanently Disabled Workers with Disproportionate Earnings Losses for Supplemental Payments, Santa Monica, Calif.: RAND Corporation, RR-425-CHSWC, 2014, available at www.rand.org/t/RR425) contained analysis and policy recommendations that informed the design of the program under evaluation in the present study.A draft version of this report was posted online for public comment from April to May 2018. As of June 14, 2018, the resulting comments can be accessed at https://www.dir.ca.gov/chswc/Reports/2018/Public_Com_RTW_Fund_Draft_Report.pdf. RAND Institute for Civil JusticeThe RAND Institute for Civil Justice (ICJ) is dedicated to improving the civil justice system by supplying policymakers and the public with rigorous and nonpartisan research. Its studies identify trends in litigation and inform policy choices about liability, compensation, regulation, risk management, and insurance. The institute builds on a long tradition of RAND Corporation research characterized by an interdisciplinary, empirical approach to public...

Earnings Losses and Benefit Adequacy in California's Workers' Compensation System: Estimates for 2005–2017 Injury Dates

“…Far-reaching changes to the workers' compensation system were enacted as part of SB 863 in 2012, such as the introduction of the Return-to-Work Supplement Program (RTWSP) which provided a supplemental payment of $5,000 to workers who experienced particularly poor outcomes. Eligibility for this payment was linked to workers who received a voucher for participation in the Supplemental Job Displacement Benefit (SJDB), a vocational rehabilitation program (See Dworsky, Quigley, et al, 2018, for a detailed description of this program). To the extent that the RTWSP may have incentivized more participation in vocational rehabilitation, this may have improved labor market outcomes for workers with some of the most-severe earnings losses.…”

“…The SJDB and RTWSP in California offer one such example of the latter, specifically targeting workers who do not receive an offer of employment from their at-injury employer. The SJDB provides workers with a voucher for vocational rehabilitation or other training opportunities and makes workers eligible for a supplemental payment through the RTWSP (See Dworsky, Quigley, et al, 2018, for more details on the RTWSP and SJDB). Another policy option could be to encourage employers to retain injured workers, perhaps by offering transitional or modified work, subsidizing accommodation costs, or providing incentives to employers who rehire workers who have previously been injured.…”