California Workers’ Compensation: Self-Insured Employers—Claims Volume and Losses Fall

Recently, the Insurance Journal reported that the workers’ compensation claims volume and the workers’ compensation total losses incurred both fell for self-insured employers in California in the second half of 2022 and the first half of 2023. Notably, the year-of-year claims filed during this period were down nearly 17%. Our Bakersfield workers’ compensation defense law firm highlights the key things to know about self-insured employers and the fall in claims volume/total losses in 2022/2023.

Background: What is a Self-Insured Employer?

Employers in California have a mandate to obtain the proper no-fault workers’ compensation insurance coverage for their employees. However, employers have some flexibility in determining how they will do so. A business or non-profit organization does not necessarily have to join the California state workers’ compensation fund. Instead, they can opt to operate as a self-insured employer.

In California, a self-insured employer is a business that decides to handle its own workers’ compensation claims. Instead of joining the California workers’ compensation system, the company instead sets aside a pool of money to pay for any worker injuries or illnesses related to the job. The firm must get approval from the state and meet certain statutory criteria to be a self-insured employer.

The Report: Fewer Claims, Fewer Costs for Self-Insured Employers

The initial data for the 2022/2023 fiscal year indicates that both claims volume and workers’ compensation losses dropped for self-insured employers in California. Here is an overview of the data for the second half of 2022 and the first half of 2023:

  • A Drop in Total Self-Insured Employer Claim Volume: Initial data for the fiscal year 2022/2023 shows a 16.8 percent decrease in total claim volume for public self-insured entities in California’s workers’ compensation system. Notably, this was largely driven by a decline in indemnity claims. The California Workers’ Compensation Institute (CWCI) report reveals that the number of claims fell from the previous year’s record of 144,676 to 120,328. A large drop in COVID-19-related claims was a big factor.
  • A Drop in Total Self-Insured Employer Losses: The CWCI report also indicates a decrease in total incurred and paid losses for public self-insured entities. This marks the first time since the 2012 workers’ compensation reforms that total paid losses have fallen. More specifically, indemnity payments decreased by 17.4 percent—down to $317.1 million. Medical payments fell by 3.8 percent—down to $193.2 million. That being said, the average benefit payment per claim actually increased by nearly five percent.

Consult With Our Bakersfield, CA Workers’ Compensation Defense Attorney Today

At Yrulegui & Roberts, our Bakersfield defense lawyers are standing by, ready to protect your rights and your interests. If you have any questions about defending a workers’ compensation claim as a self-insured employer, we are here to help.  Give us a phone call now, or use our online contact form to schedule a confidential initial consultation. We provide workers’ compensation defense services in Bakersfield, Kern County, and all around the region in Central California.