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Workers’ Comp Costs Are Killing California Businesses Blog 4-12-2017

Posted by BrianDomingo at 9:11 AM on Apr 12, 2017


As an employee you may not realize how much the cost of Workers’ Comp Insurance can hurt the bottom line of your employers business. As a business owner you understand just how much these costs can cripple your business!

Workers’ Comp premiums have continued to rise, for some at double to near double digit increases. While others have seen rate reductions the trend still has increases coming in future years. Senate Bill 863 workers’ comp reforms passed in 2012 has helped but much more needs to be done. California businesses still pay one of if not the highest rate in the country.

California’s high insurance rates are largely driven by the highest frequency of permanent disability claims in the country, very high medical costs per claim driven by a more prolonged pattern of medical treatments, and much higher than average costs of handling claims and delivering benefits.”

Changes need to be made to the whole process of handling claims and the delivering of benefits! Along with these changes, we must get a handle and do more to combat fraudulent claims. Based on estimates by the National Insurance Crime Bureau (NICB), workers' compensation fraud is a $30 billion problem annually in the United States. In California, it is estimated that workers' compensation fraud costs the state between $1 billion to $3 billion per year. During fiscal year 2014-15, the Fraud Division identified and reported 5,931 suspected fraud cases; (SFCs) assigned 572 new cases, made 240 arrests and referred 197 cases to prosecuting authorities. Potential loss amounted to $277,032,462. That is a very small amount when the estimates of fraud in California are $1 billion to $3 billion per year.

As Governor I will push for More Workers’ Comp Reform, help get rates down, combat fraud, and make California a business friendly state.