California is the Costliest State for Workers’ Compensation Premiums
California now officially has the highest workers’ compensation premium of any State in the country. And while that may not seem important to workers, higher workers compensation premiums can negatively affect how employers handle their employees’ workers’ comp claims in the long run.
California’s High Workers Compensation Premiums
Every two years, the Oregon Department of Consumer and Business Services issues a state-by-state ranking of workers’ compensation premiums. The most recent report seems to indicate that despite California’s workers’ compensation reforms signed into law in 2012, it easily topped the 2016 Oregon Workers’ Compensation Premium Rate Ranking, and was still the second highest on the list in 2018.
In this report, worker’s compensation premium rates ranged from a low of 82 cents per $100 of payroll (North Dakota) to a high of $3.08 in New York. California’s premiums came in at $2.87 per $100 of payroll, which is 169% higher than the median premium, according to Oregon’s study. The Workers’ Compensation Action Network, a watchdog group that monitors workers’ compensation rates and policies, characterizes California’s rates as unacceptable, especially considering the fact that the system was overhauled a mere two years ago. In fact, California has ranked among the most expensive states for more than a decade.
Why California’s High Workers Compensation Premiums Matter
Higher insurance premiums of any kind – including workers compensation insurance premiums – cut into an employers’ profits. And when profits are lower, companywide cost cutting effects can be implemented that directly and indirectly affect workers. Lay-offs, short-staffing, cutting back on perks or other benefits are just some cost-cutting measures and employer may use to offset high workers’ compensation premiums. Additionally, employers’ workers compensation premiums can rise even further if their insurance company is faced with too many claims. So a company facing already astronomical premiums may try to deny valid workers compensation claims in order to try and contain premium costs.
The Solution to High California’s High Workers Compensation Premiums
SB 863 was intended to minimize litigation costs, but a rash of expedited hearings and a higher than anticipated volume of Independent Medical Reviews have in fact resulted in even higher litigation costs. That being said, many of the intended changes made by SB 863 are having a positive impact, and show promise for the future. For instance, there has been a drop in medical lien filings; and new regulations on spinal implants and changes to the physician fee schedule are also reducing costs. But with no sure solution in sight to California’s exorbitant workers’ compensation premiums, more reform may well be needed.
Our workers’ compensation attorneys will monitor the situation and keep you informed.
Long Beach Workers Compensation Lawyers
If you were injured or made ill in the workplace, we recommend that you speak with an experienced workers comp lawyer immediately. Even if you are currently receiving workers comp benefits, it is a good idea to get some legal advice to protect your rights going into the future.
An experienced workers compensation lawyer can help you identify minor issues before they become major problems – and make sure that you not only receive your benefits now, but for years to come.
Your consultation with our workers’ comp lawyers is 100% confidential, and neither your employer nor your insurance company will be notified that you requested a consultation with us. Our lawyers will help you understand your rights and work tirelessly to ensure that you receive the maximum workers’ comp benefits for which you qualify.