Workers' Comp Executive
November 30, 2017
California employers – be they insured or self-insured – will be paying more to fund the state’s workers’ comp system next year. Insured employers will be paying nearly 4% of premium – a 28% overall increase for assessments over 2017 – while the rate for self-insured employers is up nearly 17%. All of the increase goes to fund the Department of Industrial Relations and statewide anti-fraud efforts.
DIR issued its assessment notice today and insured employers will be paying 77% more for the assessments – a total of 1.97% of workers’ comp premium compared to 1.11% last year for insured employers. DIR’s assessment is on top of the 2% assessment that the California Insurance Guarantee Association levied for next year – the same rate insured employers are paying this year.
Self-insured employers pay based on the total indemnity benefits they paid out to injured workers. In 2017 that rate was 6.87% but next year it climbs to 8.01%.
The biggest increases are for the assessments earmarked for the general administrative fund, the anti-fraud fund and the state’s subsequent injuries benefits trust fund (see charts below). Earlier this fall, the Fraud Assessment Commission approved an 8% increase in the assessment for next year after granting a 5% increase this year. Employers pay of $60 million annually for these efforts.
The assessments are fronted by carriers to the Department and then are recouped from employers as part of their workers’ comp payments in 2018. Self-insured employers pay assessments directly to DIR.
For questions, please contact B&P's Workers' Compensation Specialist, Patrick Kim, at 925.296.5478.