Workers Comp

Calif. proposed comp rate hike due to fee schedules

Louise Esola

April 30, 2021 Reprints

Regulation Workers Comp Coverage Workers Comp Pricing More + Less -

The Workers Compensation Insurance Ratings Bureau has proposed a 2.7% increase in advisory pure premium rates for fall 2021 mostly due to “significant” changes in the state’s medical fee and medical-legal fee schedules.

The average rate proposed for 500 worker classifications is $1.50 per $100 of payroll, according to the bureau’s Thursday regulatory filing with the California Department of Insurance, which must approve the proposal. If approved, the filing would take effect Sept. 1, 2021.

The proposed rates are based in part on changes adopted by the California Division of Workers’ Compensation in 2021, which includes modifications of the Evaluation and Management Section of the Official Medical Fee Schedule, effective March 1, and the Medical-Legal Fee Schedule, effective April 1. In total, the WCIRB estimates an overall 1.5% cost increase from these two schedule changes, according to the filing.

The bureau also said that insurer losses incurred during accident year 2020, including “exposure, premium and loss experience significantly impacted by the pandemic” but excluding “all claims directly arising from a COVID-19 diagnosis” impacted the proposed rate filing.

The filing included “refined projection methodologies to adjust for distortions caused by the pandemic and … largely relied upon pre-pandemic experience,” among other issues.

The WCIRB is not recommending that provisions be included in this filing to reflect estimated costs of COVID-19 claims on or after Sept. 1, 2021, due to forecasts that the U.S. will be nearing herd immunity by summer.

More insurance and workers compensation news on the coronavirus crisis here.