Report: Increasing Workers’ Comp Losses For California Public Self-Insureds

March 12, 2012
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A analysis of more than 10 years’ worth of data shows for the fifth consecutive year increases in the average loss per claim, led by escalating medical losses, pushed up total workers’ compensation costs for cities, counties and other public agencies in the state last year.

The analysis was conducted by the California Workers’ Compensation Institute, which compiled data from the California Office of Self-Insurance Plans (OSIP), and issued a report on Monday.

The latest summary of claims data for fiscal year 2010/1011, issued Jan. 30, provides the first look at California public self-insureds’ claims volume, total loss payments and total incurred (paid losses plus reserves for future payments) for the year ending June 30, 2011.

OSIP compiles the data annually from reports submitted by public self-insured entities other than the state of California. That data includes cities and counties, local fire, school, transit, utility and special districts and joint powers authorities.

The FY 2010/2011 summary shows these employers provided workers’ compensation coverage to 1.92 million California public workers whose wages and salaries totaled $95.6 billion for the 12 months ending June 30, 2011, the CWCI report shows.

The number of claims reported by public self-insured fell 1.9 percent last year to 119,007 cases, but that was less than the 5.9 percent reduction in the covered workforce, so public self-insured claim frequency rose from 5.9 to 6.2 claims per 100 workers in FY 2010/2011, only the second increase in the last decade.

Even with the declining number of claims, public self-insureds’ total paid losses at first report increased for the fifth year in a row, climbing to nearly $343 million, according to the report, which shows that figure was up 7.8 percent from the comparable figure for FY 2009/2010, and up nearly 31.9 percent from the post-reform low of $259.9 million in FY 2005/2006, the report shows.

Breaking out average paid losses by benefit type, CWCI found that the increase in public self-insured loss payments over the past five years has been led by growth in medical losses, which have risen 37.4 percent from the post-reform low of $1,073 to $1,474 last year, while over the same period the average amount of indemnity paid at first report has increased 26.4 percent from $1,112 to $1,406.

OSIP also compiles private self-insured claims data. Updated figures from California’s private self-insurers will be released later this year.

The report is posted in the Research section of CWCI’s website, CWCI.org.

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