Workers Comp

WCIRB calls experience rating COVID claims a financial incentive for safety

April 27, 2022 Reprints

Regulation Workers Comp Coverage Workplace Safety Catastrophes Coronavirus Emerging Risks More + Less -

Including the cost of claims for COVID-19 in California employers’ experience rating calculations should serve as a financial incentive for businesses to take appropriate and necessary steps to protect their employees, representatives from the Workers’ Compensation Insurance Rating Bureau said during a public hearing Tuesday.

“This really is consistent with the spirit and intent of experience rating,” WCIRB Executive Vice President and Chief Actuary Dave Bellusci said. “An employer who is very careful and follows the protocols is going to have less COVID-19 claims than the benchmark for their industry. They’ll have a lower (experience rating modification) and, all else being equal, pay less in premium, while an employer in the same industry who is maybe not as careful, not as closely following protocols in terms of keeping employees safe is likely going to have more than the industry average and, all else being equal, end up with a higher (experience modification) and paying more premium.”

The Department of Insurance held a public hearing Tuesday morning on the WCIRB’s annual regulatory filing. Representatives from the department focused largely on the WCIRB’s proposal to use COVID-19 claims occurring on or after Sept. 1 when determining employers’ experience ratings.

When the pandemic started, the WCIRB recommended, and the insurance commissioner approved, excluding COVID-19 claims from experience modifications.

Mr. Bellusci said it was a “very different world” at the time. There were no presumptions that could help determine whether an infection was work-related, vaccines did not exist, there was not a clear understanding of how the virus was transmitted and there were shortages of personal protective equipment in the early months.

Presumptions of compensability for COVID-19 claims enacted in 2020 are set to sunset at the end of the year. A.B. 1751, pending in the Assembly Appropriations Committee, would extend the presumptions through Jan. 1, 2025.

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