April 28, 2025 | Sacramento, CA — MedLegalNews.com — The California State Assembly has passed Assembly Bill 1870, also known as the Good Faith Bill, a reform aimed at curbing unjustified delays in workers’ compensation claims and holding insurers accountable for bad-faith conduct. If enacted, the bill could significantly transform how benefits are administered and enforced across the state.
The Good Faith Bill seeks to establish clearer standards for timely claims processing, ensuring that injured workers receive medical treatment and compensation without unnecessary obstacles. By codifying specific requirements for documentation and justification of any denials or delays, the legislation intends to reduce disputes between insurers and claimants, promote transparency in benefit administration, and reinforce the accountability of all parties involved in California’s workers’ compensation system.
In addition to protecting workers, the Good Faith Bill also provides guidance and accountability for insurers and employers, clarifying expectations for compliance with existing labor laws. By defining what constitutes good-faith conduct in claims handling, the legislation helps prevent exploitative practices, reduces litigation over delayed benefits, and encourages more consistent decision-making. Ultimately, the bill aims to foster a more efficient and equitable workers’ compensation system, where timely access to care and compensation is the standard rather than the exception.
Legislation Targets Loopholes That Enable Strategic Claims Delays
The Good Faith Bill introduces precise definitions and enforcement mechanisms to ensure that workers’ compensation benefits are processed promptly and fairly. Authored by Assemblymember Liz Ortega (D-San Leandro), AB 1870 explicitly states that unjustified refusals or delays in benefit payments—particularly treatment authorizations—may constitute a violation of good faith.
Currently, Labor Code § 5814 outlines penalties for delayed benefits, but vague language has allowed some employers and insurers to exploit procedural gaps. This often forces injured workers into settlements or prolongs their access to necessary care.
“This bill protects injured workers who suffer while waiting for care,” said Ortega during a hearing before the Assembly Insurance Committee. “Delays without cause are not just bureaucratic errors—they are harmful acts.”
The proposed law would address existing loopholes by mandating that any denial of benefits or delay in processing a workers’ compensation claim must be accompanied by detailed, documented reasoning that clearly explains the legal or factual basis for the action. This removes reliance on vague administrative discretion, ensuring that every decision can be reviewed and justified. Furthermore, the legislation grants workers’ compensation judges expanded authority to impose more substantial penalties on insurers or employers found to have acted in bad faith, creating stronger deterrents against unjustified delays and reinforcing accountability throughout the claims process.
Having cleared the Assembly, AB 1870 now awaits Senate consideration. If passed, it will reshape the legal expectations surrounding timely benefit delivery in California.
For full legislative text, visit the California Legislative Information portal.
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FAQs: Lawmakers Pass ‘Good Faith Bill’ to Strengthen Prompt Workers’ Comp Payments
What is the Good Faith Bill in California?
The Good Faith Bill, or AB 1870, is a legislative proposal that defines good faith standards in workers’ compensation claims and allows for stricter penalties when employers or insurers delay or deny benefits without valid justification.
Who authored the Good Faith Bill?
Assemblymember Liz Ortega (D-San Leandro) introduced AB 1870 to address inconsistencies and delays in workers’ compensation benefit delivery.
How will AB 1870 affect workers’ compensation claims?
If enacted, the bill would eliminate ambiguity around delays, require clear documentation for denials, and empower judges to penalize bad-faith conduct more effectively.
Has the Good Faith Bill become law?
As of April 2025, the bill has passed the California Assembly and is now under review in the State Senate.