Report: Insurers Lost About $2.3B on Workers' Compensation in 2011

Insurers that provide workers' compensation coverage in California lost about $2.3 billion last year, according to a report by the Workers' Compensation Insurance Rating Bureau, the Sacramento Bee's "Capitol Alert" reports.

Details of Report

The report found that insurers that provide workers' compensation coverage for most California employers collected about $10.4 billion in premiums in 2011.

However, the insurers paid out $7.7 billion for health care services and support benefits and had expenses of $5 billion last year, according to the report.

The losses on workers' compensation plans in 2011 were greater than those experienced by insurers in 2010.

The report does not include data from large private and public employers who often self-insure for job-related injuries.

Implications

According to "Capitol Alert," the report could bolster efforts by insurers to increase premiums on workers' compensation plans.

Insurers and other stakeholders are seeking to alter reforms made eight years ago to California's workers' compensation system, "Capitol Alert" reports?(Walters, "Capitol Alert," Sacramento Bee, 6/26).

Details of Reforms

In 2004, then-Gov. Arnold Schwarzenegger (R)?convinced lawmakers to make several cost-cutting changes to the workers' compensation system. Schwarzenegger's administration subsequently adopted additional administrative rules.

The changes have reduced employer costs, but other stakeholders have criticized the changes.

They argue that, under the changes:

• Disabled workers are not receiving adequate compensation;
• Health care is too tightly controlled; and
• Insurers are losing money on workers' compensation policies (California Healthline, 3/29).

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