Los Angeles Business Journal

11 Percent Hike Recommended for Workers’ Comp

By Howard Fine Wednesday, August 13, 2014

Workers’ compensation insurance rates should go up 11 percent next year from current levels, an insurance industry body said Wednesday despite objections from business and labor interests.

The governing board of the Workers Compensation Insurance Rating Bureau, comprised mostly of insurance industry representatives, voted to file an advisory rate of $2.86 per $100 of payroll, 11 percent more than the industry’s premium average as of July 1.

The advisory rate does not have the force of law, but often serves as a guidepost for insurers in setting their rates.

In calling for the higher rate, the board cited an increase in the number of workplace injury claims, a rise in the medical treatment cost per claim and smaller-than-expected savings from 2012 legislative reforms.

The vote came despite objections from the minority of business and labor representatives on the governing board who argued for a much smaller increase, according to Workers’ Comp Executive, an industry publication in Granite Bay.

The recommendation now goes to state Insurance Commissioner Dave Jones, who can accept it or issue his own advisory rate. In past years, Jones has issued rates lower than the bureau recommendations.

Under California law, every employer must either carry workers’ compensation insurance coverage or insure themselves against workplace injury claims.