Workers’ Compensation Insurer Zenith To Lower Premium Rates 10%
Officials for Woodland Hills-based Zenith National Insurance on Wednesday announced that the company would reduce workers' compensation insurance premiums by 10% this year as a result of the recently enacted workers' compensation reform law (SB 899), the Los Angeles Times reports (Lifsher, Los Angeles Times, 5/27). The law provides for immediate medical care for injured workers; requires injured workers to choose from a network of employer-selected physicians for treatment or petition a medical review panel to see a physician of their own choice; requires use of American Medical Association guidelines to rate impairments to injured workers; implements provisions to encourage injured workers to return to work; and allows employers to apportion workers' compensation payments to cover only work-related injuries. In addition, the law requires employers and workers to be considered equal before the law; limits temporary disability payments to two years instead of five years, as previously allowed; increases benefits for workers who are more than 70% disabled; gives small businesses a state reimbursement of as much as $2,500 for necessary workplace changes to allow an injured worker to return to work; requires workers to prove that an injury exists; and eliminates payments for claims of back pain and other pains (California Healthline, 5/21).
Zenith's workers' compensation insurance premium reduction, which applies to rates effective after July 1, was detailed in a filing with the Department of Insurance. Insurance Commissioner John Garamendi (D) is expected this week to recommend nonbinding workers' compensation insurance premium rate reductions for policies that are written or renewed between July 1 and Dec. 31. Garamendi has said that based on analysis of the new law's estimated savings, he would recommend a reduction of between 18% and 20%, the Times reports. In a statement, Stanley Zax, president of Zenith, the state's fifth-largest workers' compensation insurance carrier, said that the premium rate reductions are "a measured and gradualistic response" to SB 899. He said that Zenith chose a more conservative rate reduction because currently not enough is known about the new law's effects, the Times reports. "The legislation, which is encouraging and should have a favorable impact on cost trends when fully implemented, should result in additional gradual cost reductions," Zax added. Martyn Hopper, California director of the National Federation of Independent Businesses, said that the Zenith premium rate cut is "a step in the right direction," adding, "Every percentage point the rate's lowered" is beneficial for business (Los Angeles Times, 5/27).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.