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California Workers Comp System – What Happened To The Reform(s)?


California Workers Comp System Reforms Fizzled?

The California Workers Comp System was supposed to reduce costs after SB 863 was enacted in  2013.

SB 899 was the previous cost-saving measure that seemed to hold California’s Workers Comp costs which seemed to work for five to seven years.

Check out this summary page from WCAN (Workers Compensation Action Network).

The  surprising figures show  the California Workers Comp system:

  • Picture Of Hand Putting Money California Workers Comp System In Piggy Bank

    Total costs increased by 17% from 2012 to 2013

  • Was/Is the most costly WC system when comparing insurance premiums paid by employers
  • Cost more than double the median workers compensation amounts
  • Average ultimate cost per claim was $86.845 – which explains the increased premium cost to employers
  • California employers paid $3.48 per $100 of payroll for WC  coverage.

The nationwide median was $1.83.  The lowest rate was North Dakota at $.88 per $100 of payroll.   WC is usually measured per $100 of payroll.

North Dakota may be changing over time as many of the very unsafe oil worker jobs would have recently increased due to the oil boom in North Dakota.

In the early 2000s, a few of our California roofing clients were paying over $138 per $100 of payroll.   The roofers had a very large overhead from just WC alone.  I had sometimes wondered how they were able to stay afloat.

Woman California Workers Comp System Putting Coins On Piggy Bank

Most of this data came from the  Premium Rate Ranking Summary from Oregon’s Department of Consumer and Business Services.   The Oregon study, however, should not be taken as the final word on these figures.

The WCIRB – California workers comp system rating bureau- had also recommended a heavy rate increase even after the reforms were put in place.

The reason I cover the California workers comp system extensively is that many of the conundrums that are present in the state are ones that other states have faced or will face in the future.

I will cover the reasons to look further beyond this study later this week.   The studies that many people base the costs of WC in the nation may be skewed.

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James J Moore - Workers Comp Expert

Raleigh, NC, United States

About The Author...

James founded a Workers’ Compensation consulting firm, J&L Risk Management 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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