Jones Adopts Workers’ Comp ‘Pure Premium’ Advisory Rate
On Friday, California Insurance Commissioner Dave Jones (D) recommended increasing the workers' compensation "pure premium" rate by 6.7%, a smaller increase than previously recommended by an advisory board, the San Francisco Business Times' "Bay Area BizTalk" reports (Rauber, "Bay Area BizTalk," San Francisco Business Times, 11/25).
The higher rate would cover predicted increases in physician fees under a new state law (SB 863) that adjusts how doctors are paid through the workers' compensation system.
In September 2012, Gov. Jerry Brown (D) signed SB 863 into law.
The law changed the formula used to calculate benefits for injured workers.
SB 863 also requires the state to base workers' compensation fees on Medicare's method of paying physicians.
In October, a California Workers' Compensation Insurance Rating Bureau actuarial committee made a recommendation to increase rates by 9.5%. The full bureau later recommended increasing premiums by 8.7% (California Healthline, 10/29).
Details of Jones' Recommendation
Jones' recommended increase -- called an "advisory rate" -- would be applied to the pure premium rate. Under the recommendation, such premiums would increase by $2.70 per $100 of payroll.
Insurers are not required to follow the recommendation, but they often use it as a benchmark, according to "Bay Area BizTalk."
Customers' safety records and industry types generally also are considered when setting rates ("Bay Area BizTalk," San Francisco Business Times, 11/25).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.