A rate hike of 2.7% in “advisory pure premium rates” has been recommended by the Workers Compensation Insurance Ratings Bureau (WCIRB), citing recent changes in California’s medical and medical-legal fee schedules. If approved by the California Department of Insurance (CDI), five hundred different categorizations of workers will be paying $1.50 per $100 of salary. The changes, if ever, are scheduled to become effective during this year’s fall season, September 1, 2021.
The recommendation was also hinged on certain adjustments made by the California Division of Workers’ Compensation (DWC) this year. Among the changes that affected the WCIRB’s recommendation were the changes made to the Evaluation and Management Section of the Official Medical Fee Schedule and that of the Medical-Legal Fee Schedule, which both became effective on the 1st of March and the 1st of April, respectively. The result of these developments is estimated to be a 1.5% increase in cost according to the WCIRB.
Another cause for the recommendation of a workers comp’ rate hike was the overall loss sustained by insurers due to what is now being referred to as “accident year 2020”, specifically the “exposure, premium, and loss experience significantly impacted by the pandemic” – not including actual claims causally related to Covid-19 diagnoses. Another cited reason stated that all “projection methodologies” must undergo adjustments due to the way the pandemic affected such projections that did not consider the experience of any such pandemic. Lastly, the WCIRB did not include provisions to reflect Covid-19 claims on or after September 1, 2021, on their filing as it is expected that the American population should have herd immunity by then.
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