According to a report from the Insurance Journal, the committee governing the Workers’ Compensation Insurance Rating Bureau of California (WCIRB) has voted to move forward with a 2.7% increase to the “pure premium” of workers’ compensation rates. The governing committee of the WCIRB cited both the COVID-19 pandemic and other structural changes as significant factors in the decision. In this blog post, our California workers’ compensation defense lawyers highlight the key things to know about the recent news regarding workers’ compensation premiums.
WCIRB Recommendation: Additional Workers’ Compensation Rate Increase in September
Normally, the WCIRB files a recommendation for workers’ compensation rate increases by either the first of January or the first of July. However, in a somewhat unusual move, the organization is advising state regulators to approve an additional rate increase this year. There are two primary factors that were cited by the WCIRB as part of its recommendation:
- Financial disruptions directly and indirectly related to the COVID-19 pandemic; and
- Changes to California’s so-called ‘Medical-Legal Fee Schedule.’
A Proposed Increase to the ‘Pure Premium Rate’—the Impact on Employers Would Vary
The recommendation made by the WCIRB is a 2.7% increase to the pure premium rate. If approved, that does not necessarily mean that every employer will see a 2.7% increase in their workers’ compensation insurance rates. Quite the contrary, the effect on every employer will be different. The WCIRB notes that some employers could even see their workers’ compensation rates fall when all adjustments are made. Further, the rate is advisory only meaning individual insurers have discretion to alter their specific workers’ compensation rates to meet market demand.
The California Department of Insurance Must Approve Any Increase
Technically speaking, the proposed increase from the committee governing the Workers’ Compensation Insurance Rating Bureau of California is not yet official. The California Department of Insurance must approve and finalize the proposal.
By state law, there will be a public hearing before the Department of Insurance makes a final decision on workers’ compensation rates. That being said, typically, such proposed increases are eventually approved by California state regulatory agencies. If approved, the 2.7% workers’ compensation rate increase will take effect on September 1, 2021.
With a focus on representing employers, claims administrators, and insurers, our California workers’ compensation defense law firm will keep a close watch on rate changes and any legal or regulatory issues that could impact the rights and interests of our clients.
We Provide Top Quality Workers’ Compensation Defense Services in California
At Yrulegui & Roberts, our California workers’ compensation defense attorneys are committed to doing all the little things needed to protect your legal rights and financial interests. If you need help from an attorney, we are here as a resource. Get in touch with us today for a strictly confidential, no obligation consultation. From our offices in Fresno, Bakersfield, and Sacramento, we provide legal services throughout the area, including in Redding, Salinas, Oxnard, and Van Nuys.