Workers' compensation insurance costs continued to decline in California this year but could be pushed upward by two landmark decisions by the Workers' Compensation Appeals Board, a new report indicates.
The report was issued by the Workers' Compensation Insurance Rating Bureau, an insurance industry group that charts trends in the multi-billion-dollar system of compensating workers for job-related illnesses and injuries.
So far this year, the bureau said, workers' comp premiums have averaged 2.33 percent of payroll, down slightly from 2008 and scarcely a third of the record-high 6.45 percent rate recorded in 2003, just before the Legislature enacted a series of reforms.
Those reforms, especially the 2004 package pushed through the Legislature by newly inaugurated Gov. Arnold Schwarzenegger, sharply tightened up eligibility for workers' comp benefits. Schwarzenegger has rebuffed efforts to undo parts of the package by labor unions, workers' comp lawyers and other critics who contend that disabled workers are being denied legitimate benefits.
However, two decisions by the appeals board indirectly softened the tighter standards. The insurance rating bureau estimates that the decisions will raise workers' comp costs to insurers sharply, at least 18 percent above the 2005 level, depending on how they are implemented, thus squeezing insurers' profit margins.
The rating bureau has repeatedly recommended sharp increases in workers' comp premiums to offset the projected insurer losses, but Insurance Commissioner Steve Poizner, a candidate for governor next year, has sanctioned only token increases.
The full report may be found here.
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