The Pro Football Concussion Report

A Fan's Look at Head Injuries and the Concussion Crisis in Football

Insurance Premiums over Healthcare?

AB-1309 Bill Sponsor Fresno Politician Henry Perea


Why would NFL team owners be anxious to change California law that has allowed some NFL retired players to collect workers compensation benefits? Why would they care if injured former employees are able to collect from a system that they paid into? The only explanation that seems reasonable is that the more NFL teams’ workers comp insurance companies pay out, the more that the insurance companies will charge the owners for insurance premiums. And not that those dollar increases even come from the owners’ pockets – negotiated in the CBA (and agreed to by the NFLPA) is that workers compensation costs are subtracted from the players’ salary budget (cap).

The California push to change their workers comp laws (bill AB 1309) has several peculiarities. The public comments from the sponsors of the bill seem to display a convenient lack of understanding of how workers compensation insurance even works. Their promotion of the bill is based on the idea that, as bill sponsor Assemblyman Henry Perea recently said, “California businesses can’t continue to foot the bill for thousands of claimants who didn’t work here and weren’t specifically injured here.” Well, in most cases California businesses don’t foot the bill for claims. The insurance company that was paid the premium for the player’s insurance policy pays the claim. In some cases, if the insurance company that was originally paid the premium is out of business at the time of the claim, the state could be on the hook for the claim. A default of this type involves the state’s safety net insurance, the Self-Insurers’ Security Fund. But realizing that potential inequity, players’ unions have offered to work with the state to indemnify California against such a responsibility. Perea’s claim is also inaccurate that the players “didn’t work here.” In California, visiting players are liable for paying state income taxes while working in the state. Because of their generally high salaries, a visiting player might pay as much into California’s tax system in 1 or 2 weeks of practice and games as an average full-time resident pays in a year.

The sponsors of the bill have received plenty of campaign cash from the insurance companies. The principal sponsor of the bill, the 35 year old Perea received almost $1.1 million dollars in campaign cash for his Fresno campaign against former Marine, James “JD” Bennett. Bennett had collected a more typical local election amount of $19,000 in campaign contributions. Perea, the son of California politician Henry Perea Sr. and already in his 10th year in politics, easily won the election. According to the campaign finance website,, 99% of Perea’s campaign contributions came from organizations and only 1% from individuals. Organizations representing liquor, tobacco, insurance, real estate, pharmaceutical, oil and industrial companies donated generously to Perea’s campaign. One of Perea’s notable positions was in defense of industry during a 2012 toxic chemical issue in which companies such as Pepsi were accused of violating California’s 1986 Proposition 65 which restricted toxic discharges into drinking water. In Perea’s criticism of Prop 65, he said, “the point of Proposition 65 was to make clean drinking water, not to make a few law firms rich.” Coincidentally, in December of 2011 and May of 2012 Perea received out-of-state campaign contributions from PepsiCo.

Additionally, in an embarrassing editorial bill co-author Curt Hagman stated numerous inaccuracies while trying to explain his support for the bill. Possibly confusing the numbers from the unrelated NFL concussion litigation, Hagman claimed that “more than 4,500 professional athletes have found a loophole in our workers’ comp system.” Huh? 4,500 athletes have filed for workers compensation benefits. No they haven’t. Hagman also reminded readers “that they were already covered by their own team’s insurance, disability insurance, and their own pensions.” What? No they weren’t. Not sure where Hagman is getting his talking points, but in reality, workers compensation laws prohibit double payment of insurance benefits. Hagman is also a businessman who owns a bail bond company with 3 locations in Southern California.

This battle between retired players and owners over health benefits has been going on for awhile. Last December, in two federal complaints, 49 players sued the NFL Management Council (team owners) and the Buffalo Bills, Denver Broncos, New York Giants and Philadelphia Eagles.

In addition, the NFL is already involved in lawsuits with their respective insurance companies over the concussion lawsuits. The entities are suing each other to determine who is responsible for paying litigation costs for the concussion related claims.

This week, Tom Brady and Drew Brees contributed an editorial in the San Francisco Chronicle in opposition to the bill.

“As players, we take less salary so that there is money to care for injured players when their careers are over. The salary cap was reduced by $64 million last year alone to cover the costs of the teams’ workers’ compensation premiums. Also, professional athletes do, and should, contribute their fair share. According to the California Franchise Tax Board, men and women who play professional sports contributed nearly $200 million in taxes in 2011 on the money they earned any time they played in a California stadium or arena.”

Brady grew up in San Mateo, California and Brees and played 5 seasons for the San Diego Chargers.

On attorney (and football wife) Dawn Neufeld sums up her perspective on CA AB 1309:

Think about it – the state of California will gain nothing by passing this law.  Taxpayers aren’t paying out of pocket for these claims.  But the NFL and other leagues and teams will save money on premiums while former pro-athletes will be prohibited from filing claims and receiving benefits for their injuries.  It doesn’t take a rocket scientist to figure out who truly stands to benefit from the passage of AB 1309.

In May, Jim Trotter of Sports Illustrated wrote a significant piece about the bill. In the article, Trotter described a typical situation in which an NFL retiree filed in California:

Retired fullback Lorenzo Neal is among those who has filed in California. The four-time Pro Bowler played for seven teams over 16 years, including five with the San Diego Chargers. Yet despite being a lifetime California resident — he still resides in his hometown of Fresno — he’d be ineligible for workers comp under the bill because he ended his career with an out-of-state club. He says people shouldn’t be surprised that players don’t file claims while they’re still capable of being employed by a team.

“Let’s be real,” he says. “You don’t want to file a claim while you’re still playing because teams will use it against you and you won’t have a job. Just like with concussions, guys still try to get back on the field because they want to stay employed and you only have so many years that you can play the game. So, yes, you see guys go out on the field and play because they love the game, but you also understand what happens if you don’t play.”

The bill is set to be heard in the California State Senate Committee on Wednesday, June 26.



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