California’s workers comp rate roller-coaster looks to be poised to make another steep drop. The combination of the national decrease in claims frequency and the impact of reforms have led to drastic decreases in comp rates, with more likely on the way.
While some of the changes in frequency, or the number of claims per 100 FTEs are due to increased emphasis on safety, a change in the mix of occupations, drug testing programs, safer autos, and a decline in injury-heavy industries such as manufacturing, there are two other external factors that are likely major influences.
According to Workers Comp Executive, “because of the reforms there are fewer incentives to move claims into the workers’ comp system.” Interpretation – it is more difficult to get an injury classified as a workers comp claim, thereby reducing the number of claims. For those not intimately familiar with CA comp history, for a while there it was pretty easy to get almost anything classifed as an occupational injury, including a stress claim and/or psych issue if it could be related to employment. The new laws have made this much more difficult.
A hidden issue has been brought to our attention by Peter Rousmaniere, who notes that “many (undocumented workers) in this study do not file, even for disabling injury” under workers comp. (Peter also points us to a really interesting study done by RAND on the influence of group health insurance coverage on workers comp injury filing behavior – but that’s for another post).
So, how many undocumented workers are there, and what jobs do they hold? Again, kudos to Peter for his research and analysis – his assessment is that 19.5% of workers in laboror and unskilled jobs are “illegals” (my quotes). This is one of the highest rates in the country.
Will their propensity to not file WC claims change? Certainly one of the biggest obstacles to filing will be removed if the undocumented worker legislation pending in Washington becomes law. If this does happen, there may be a sudden surge of claims.
What does this mean for you?
For WC insurers and employers – good news. But remember the glory days of the mid-nineties, when open rating led to a crash in comp costs, followed by a very painful shakeout that left the largest carrier (Golden Eagle) insolvent, created huge stresses on the State Fund, and drove many carriers either out of business or to the brink.
This can’t, and won’t, last.
Mar
23
What is the “big obstacle” that will be removed if worker legislation pending in Washington becomes law? Can undocumented or illegal workers currently file workers comp claims? Do you need a social security number in order to file a workers comp claim?
I was wondering if there had been a change in the law allowing for the undocumented workers to file for worker’s comps w/o SSN?
I also see carriers now pushing treating doctors to call injuries “exacerbations” so that an injury is not counted. They claim only aggravations are treated as injuries. This practice is akin to the practice of making injuries “first aid” just to make the numbers look good.