California Workers Comp System – Possible Changes Coming Soon

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California Workers Comp System Upcoming Changes

Graphic Of Hand Carrying California Workers Comp System On Tab
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California has performed well in finding ways to control their runaway Workers Compensation system.  As I predicted a few years ago, the California Workers Comp system would see the return of insurers once the environment stabilized enough that carriers would be able to underwrite Workers Comp policies at an anticipated profit.

The State Compensation Insurance Fund (SCIF) went from being the insurer of last resort to practically the only insurer of Workers Comp in California.  That is not a good situation when one carrier is writing coverage similar to a monopolistic state fund.

As I mentioned two blog posts ago, the average premium paid per $100 of payroll for California employers was reduced almost 70% from 2003 to 2009.  Senate Bill 899 allowed the employers and insurance carriers to exercise more control over Workers Compensation claims including the all important medical provider networks (MPN’s).

Bar Graph California Workers Comp System With Hand Thumbs Up
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My opinion is that the Workers Compensation rates in CA will increase steadily over the coming years due to the medical costs associated with the claims.  The rating bureau for CA – The WCIRB has said that the upcoming medical costs will rise 13% per year.   I think there will be a loosening of the physical medicine guidelines such as physical/occupational therapy and chiropractic.  How I came to this conclusion was in a study that I performed for a large physical medicine provider group late last year.  I forecasted that the state of CA will allow more chiropractic and physical therapy visits per patient after examining all the data.

However, I do not think that the permanent disability rating system based on AMA guidelines will change.  I do not think there will be an increase over the 104 week maximum for temporary total disability benefits.

Even if the premium rates grow a small amount each year, anything will be better for California employers than the incredible increases in Workers Comp rates from 1999 to 2003.

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James Moore

Raleigh, NC, United States

About The Author...

James founded a Workers’ Compensation consulting firm, J&L Risk Mgmt Consultants, Inc. in 1996. J&L’s mission is to reduce our clients’ Workers Compensation premiums by using time-tested techniques. J&L’s claims, premium, reserve and Experience Mod reviews have saved employers over $9.8 million in earned premiums over the last three years. J&L has saved numerous companies from bankruptcy proceedings as a result of insurance overpayments.

James has over 27 years of experience in insurance claims, audit, and underwriting, specializing in Workers’ Compensation. He has supervised, and managed the administration of Workers’ Compensation claims, and underwriting in over 45 states. His professional experience includes being the Director of Risk Management for the North Carolina School Boards Association. He created a very successful Workers’ Compensation Injury Rehabilitation Unit for school personnel.

James’s educational background, which centered on computer technology, culminated in earning a Masters of Business Administration (MBA); an Associate in Claims designation (AIC); and an Associate in Risk Management designation (ARM). He is a Chartered Financial Consultant (ChFC) and a licensed financial advisor. The NC Department of Insurance has certified him as an insurance instructor. He also possesses a Bachelors’ Degree in Actuarial Science.

LexisNexis has twice recognized his blog as one of the Top 25 Blogs on Workers’ Compensation. J&L has been listed in AM Best’s Preferred Providers Directory for Insurance Experts – Workers Compensation for over eight years. He recently won the prestigious Baucom Shine Lifetime Achievement Award for his volunteer contributions to the area of risk management and safety. James was recently named as an instructor for the prestigious Insurance Academy.

James is on the Board of Directors and Treasurer of the North Carolina Mid-State Safety Council. He has published two manuals on Workers’ Compensation and three different claims processing manuals. He has also written and has been quoted in numerous articles on reducing Workers’ Compensation costs for public and private employers. James publishes a weekly newsletter with 7,000 readers.

He currently possess press credentials and am invited to various national Workers Compensation conferences as a reporter.

James’s articles or interviews on Workers’ Compensation have appeared in the following publications or websites:

  • Risk and Insurance Management Society (RIMS)
  • Entrepreneur Magazine
  • Bloomberg Business News
  • WorkCompCentral.com
  • Claims Magazine
  • Risk & Insurance Magazine
  • Insurance Journal
  • Workers Compensation.com
  • LinkedIn, Twitter, Facebook and other social media sites
  • Various trade publications

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