Employers paying a bit more in workers’ compensation premiums
California employers are paying a bit more for workers’ compensation insurance.
New rates filed by the top 100 companies, accounting for 96.7% of the California market, increased by an average of 2.8% in January, said state Insurance Commissioner Dave Jones.
California’s largest workers’ compensation company, the government-run State Compensation Insurance Fund, will keep its rates basically flat this year. The company controls about 15% of the state market and serves as insurer of last resort for small employers.
The average hike will affect most companies and organizations required by law to buy the coverage that pays medical expenses for workers injured on the job and provides compensation for temporary and permanent work-related disabilities. Most employers’ policies renew in January.
This year marks the start of a new system devised by regulators as a benchmark for insurance companies that file advisory rates with the Department of Insurance. Although many insurers voluntarily set their rates close to the benchmark, they are not required to get the rates approved by the commissioner.
“The new changes are positive because they enable policymakers and policyholders to better understand the true costs in the system,” said Nicole Mahrt, a spokeswoman for the Assn. of California Insurance Cos.
California’s workers’ compensation premiums have fallen dramatically since the Legislature passed a series of overhauls in 2003 and 2004. Rates fell from a high of $6.29 per $100 in employer payroll in 2003 to a low of $2.16 in 2008, according to the Workers’ Compensation Insurance Rating Bureau, an industry-backed statistical agency.
Since then, they’ve started to climb somewhat, partially because of rising medical costs. Last fall, they hit $2.37 per $100 of payroll.
Losses on claims have been climbing steadily since bottoming out in 2006 but remain about 25% lower than their high point in 1999.
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