Calif. Private Self-Insured Workers’ Comp Injury Claims Decline 11%

September 23, 2010

The number of job injury claims reported by private self-insured employers in California fell more than 11 percent between 2008 and 2009 as employment declined, but those declines were offset by the average amount per claim. According to figures tallied by California Workers’ Compensation Institute, total workers’ compensation benefits paid by private self-insureds declined only 4 percent, as the average paid and average incurred amounts per private self-insured claim rose sharply.

Private self-insured employers covered 2.17 million California employees in 2009 (9.2 percent fewer than in 2008), and reported a total of 81,473 claims – 11.2 percent fewer than the 91,715 private self-insured claims tallied in the 2008 report. Total wages and salaries for those employees amounted to $79.3 billion, or 3.4 percent less than the total noted for private selfinsured employees in the 2008 first report.

With more than 10,000 fewer claims in the 2009 first reports, year-end paid losses for California private self-insureds totaled $183.5 million ($69.3 million indemnity + $114.2 million medical), or 4.1 percent less than the $191.4 million recorded in the first report for 2008 claims, CWCIz said. That decline in overall loss payments, however, was far less than the double-digit decline in claim volume, as the average amount paid per private self-insured claim continued to rise, climbing to a post-reform high of $2,252, up 7.9 percent from 2008, and 30.2 percent higher than the post-reform low recorded in 2005. The distribution of year-end paid losses on private self-insured claims shows indemnity payments averaged $850 for the 2009 claims, 5.7 percent more than in 2008 and 16.3 percent more than the recent low of $731 in 2006; while average medical payments on the 2009 claims rose to $1,402, up 9.3 percent from 2008 and 41.2 percent higher than post-reform low of $993 noted in 2005.

According to the report, yearh-end incurred losses on the private self-insured claims reported in 2009 totaled $580 million, down only 0.5 percent from the $583 million total noted in the first report for 2008 claims, despite the the 11.2 percent decline in the number of reported claims. The reason, once again, was that the big drop in claim volume was offset by an increase in the average incurred cost per claim, which jumped 11.9 percent from $6,360 in the 2008 first reports to $7,119 in the 2009 first reports – the highest level since SB 899 was enacted, and 27.4 percent more than the post-reform low of $5,588 recorded in 2005, CWCI said. That increase was spurred both by higher indemnity costs and higher medical costs.

Average incurred indemnity on the private self-insured claims jumped 12.1 percent to $2,489 – the highest level since 2004, the year in which the workers’ compensation reforms were enacted; while average incurred medical climbed 11.6 percent to $4,630 in 2009, bringing it back above the pre-reform level of $4,245 noted in 2003, and 34 percent above the post-reform low of $3,450 recorded in 2005.

To view the full report, visit

Source: CWCI

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