Worker’s Compensation

WORKERS COMPENSATION

Rates are increasing in California and the PHCC has an exclusive program that can help. The workers compensation rates that had fallen by 76% in California over the last 19 years are heading up and the question now is by how much, and how California business will absorb the increase in costs. But there is good news for members of the PHCC; you have a workers compensation program available to you which offers exclusive pricing, claims and safety support.

The California Workers Compensation Rating Bureau recommended a 23.7% rate increase as of July 01, 2009, and at that time Steve Poizner, our current insurance commissioner, rejected the WCIRB request to increase the Cost Claims Benchmark. He felt that insurers were inefficient and were not fully using available tools to control costs, and that the insurers were attempting to pass unsupported costs along to employers in the form of rate increases.

Workers Compensation costs are driven primarily by two components - medical and indemnity. The indemnity portion takes up about 16% of the pie with the remaining 84% allocated to medical related expense. If you can ask yourself, “When is the last time I saw my medical costs decrease?” The answer is probably never. In fact, We would venture to say that California businesses have become accustomed to seeing double digit increases on an annual basis. And so based on this fact alone wouldn’t you question how rates fell so much over the last 19 years?

There were many factors that contributed to the reduction in workers compensation costs over the last several years. Much of this had to do with legislation that was passed by our current governor, but there is no avoiding the fact that medical costs and increase in utilization have outpaced any savings brought by the legislation. Did you know that many times the cost of interpreting services exceeds the actual cost of the medical payments?

But it is important that California continues to have a competitive workers compensation market. Over the last several years many carriers have entered the marketplace which has helped make this a very competitive market, but just as quickly these carriers leave when they see rapidly deteriorating profits.

The insurance carriers that have entered the market place come in many forms, and can structure themselves in different ways, but all that the buyer of workers compensation sees is a piece of paper. And more frequently than not, they look at the bottom line premium because the cheapest is always the best, right? This is a wise process to follow if you never have a claim, but who can predict that? Who do you want plumbing your home or commercial building? Is there a point where a competitive price along with the necessary experience beats the cheapest price?

PHCC has partnered with an insurance company who has made a commitment to California, along with intelligent pricing and underwriting decisions, and who can provide a claims and safety service that we can work with to help manage claims and hopefully avoid future claims.

Please contact our office at 916-564-5209 or 800-700-4704 for additional information or a quote request.