The following statement was issued today by the Workers' Compensation Action Network (WCAN) in response to the Premium Rate Ranking Study published by the State of Oregon Department of Consumer and Business Services (report summary here). The statement may be attributed to Jerry Azevedo, spokesperson for WCAN:
California Again Ranked Most Expensive State for Workers' Compensation
"Try as we might to reform California's workers' compensation system, employers here continue to bear the heaviest cost burden in the nation - by a wide margin. These costs drain dollars that should be going to job creation, employee benefits, company growth and public services in California. Instead, employers continue to pay more to fund an inefficient system where nearly one-third of all dollars goes to litigation and other expenses rather than injured workers.
"This same study has consistently ranked California among the most expensive states for more than a decade. It's worth noting that California's lowest ranking since 2000 (ranked 13th in 2008) came only after legislative reforms helped reduce employer premiums by 66 percent from 2003 levels. These reforms were later eroded by court rulings and new abuses by system vendors.
"Since 2009, premium costs in California have climbed by 41 percent due, in part, to an increasing rate of work injury claims, at a time when the rate of claims in most states has been declining. In addition, California's system is experiencing more claims for cumulative trauma and those filed post-employment, particularly in the Los Angeles region, and average costs per claim have increased by $30,000 since 2005.
"The newest ranking report underscores that although reforms enacted in 2012 (SB 863) ushered in new tools to reduce litigation and improve efficiency, the projected 'savings' from these measures were put toward increasing benefits for injured workers by more than $1 billion. Whether these cost offsets will be sufficient to fully pay for the benefit increase remains to be seen. Meanwhile, employer costs have increased since 2012 and the reforms are highly vulnerable to new abuses and legal rulings that run counter to the legislature's intent. In other words, the high costs in California's system could still get much worse."
"What's clear is that California has more work to do to bring employer costs more in line with what employers in other states pay for workers' compensation."
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"California approved Gov. Schwarzenegger's reform of workers' compensation in 2004. This successfully reined in uncontrolled insurance costs that hurt not only businesses, but also school districts and nonprofits. Interest groups now are quietly working to roll back these reforms and should not be allowed to succeed."
- San Francisco Examiner, "Five easy ways to boost economy"