Report Recommends Raising Workers’ Compensation Premiums

Workers' compensation premiums in California should increase by 3.4% in 2014, according to a report by the Workers Compensation Insurance Rating Bureau, the Sacramento Bee's "Capitol Alert" reports.

The report represents a non-binding recommendation for insurers (Walters, "Capitol Alert," Sacramento Bee, 8/12).

Background

In September 2012, Gov. Jerry Brown (D) signed into law a bill (SB 863) that overhauled the state's workers' compensation system.

The law -- by Sens. Kevin de León (D-Los Angeles) and Jose Solorio (D-Anaheim) -- changed the formula used to calculate benefits for injured workers, increasing their compensation by an average of 29%.

It also eliminated benefits for certain health conditions that often are subject to lawsuits, such as psychiatric problems, sexual dysfunction and sleep loss.

The State Compensation Insurance Fund said employers likely will pay less for workers' compensation insurance under the law.

In August 2012, the WCIRB released a study finding that SB 863 could produce savings of about $400 million (California Healthline, 4/9).

Details of Report

Despite expected savings under the law, the WCIRB report found that premiums for workers' compensation insurance should increase to an average of $2.62 per $100 of payroll.

However, the bureau said the estimate could change if the state Division of Workers Compensation adopts a new payment schedule for health care providers who treat individuals with workers' compensation insurance.

California Insurance Commissioner Dave Jones (D) is expected to comment on the report and release his own rate recommendation ("Capitol Alert," Sacramento Bee, 8/12).