Employees may also soon be seeing changes to disability insurance regulations.
Dave Jones, the insurance commissioner in California, has just approved a 8.25 percent workers comp advisory pure premium rate increase in the state for policies that are either new or renewing as of July 1 of this year.
Jones explained the reason for the increase in his order that called for it.
He stated that though it may not look like there has been much of a change in the costs per unit, the increasing use of medical care seems to be the driving force behind the overall rise in the costs of the coverage.
The order called for the Workers’ Compensation Insurance Rating Bureau of California to increase their pure premium rates by an average of $2.49 for every $100 of payroll. There was already a $2.30 advisory pure premium rate increase that took effect on the first of the year. However, insurers had already been using a rate level for average filed pure premiums of $2.41 per $100 of payroll.
As the costs in the system are maintaining their rise, there hasn’t been much of a difference in the average price that is being charged by insurance companies to employers, as market competition has been keeping them down.
The order from Commissioner Jones said that “Second, and equally important with increasing costs and the draw-down of surplus and capital, this pricing trend will not continue. Eventually, premiums will increase for employers.”
He also went on to recommend that any dispute between medical service providers and those paying for that care must be promptly addressed in order to make its delivery more timely, and to shrink the liens filings for their payments.
These changes will also be impacting disability insurance.
The commissioner explained that there has been a lack of “reasonable compensation” for injured workers due to the changes that have been made to permanent disability coverage. He stated that a solution must be found through the use of the savings of the system and improvements in benefits.
He feels that failure to improve disability insurance to support workers comp will only lead to greater cost burdens on employers.