January 2024 – Workers’ Compensation – Rules on First Aid Claims Reporting


THE CALIFORNIA Workers’ Compensation Uniform Statistical Reporting Plan requires that employers report small, medical-only first-aid claims to their insurance carrier.

 

Many employers fail to report these claims as they consider them too small since the worker doesn’t lose any time from work and they don’t have to go to a doctor. Under Rating Bureau rules, employers are required to report the cost of all claims for which any medical care is provided and medical costs are incurred — including those involving first aid treatment — even if the insurer did not make the payment.
The term “small medical-only claim” is also used to refer to first aid claims.
For workers’ comp purposes, that also means that the injured worker did not miss work because of the injury. Besides these rules, there is a very good reason for reporting these claims because what starts as a first aid claim can develop into a larger claim over time. At that point, if you never reported the claim in the first place, coverage issues may arise.

Additionally, any physician attending any injured employee must send copies of the Doctor’s First Report of Occupational Injury or Illness to the workers’ compensation insurance carrier or employer within five days of the initial examination. The insurer or employer must submit the physician’s report to the Department of Industrial Relations (DIR) within five days of receipt.
Penalties for non-compliance Any employer or physician who fails to comply with the submission of the Doctor’s First Report for first aid claims may be assessed a civil penalty of not less than $50 nor more than $200 by the DIR if a pattern or practice of violations or a willful violation is found.

FIRST AID CLAIM EXAMPLES
• Abrasions and cuts that require cleaning, flushing, or soaking.
• Using hot or cold therapy for a muscle injury.
• Drilling a fingernail to relieve pressure, or draining fluid from a blister.
• Removing foreign bodies from the eye using only irrigation or a cotton swab.
• Removing splinters or foreign material from areas other than the eye by irrigation, tweezers, cotton swabs, or other simple means.


October 2023 – Workers’ Compensation – Insurance Commissioner Orders Rate Reduction


CALIFORNIA INSURANCE Commissioner Ricardo Lara has issued an order that cut the average advisory workers’ compensation benchmark rate across all classes by 2.6%, starting Sept. 1.

The benchmark rate, also known as the pure premium rate, is a baseline that covers just the cost of claims and claims adjusting, but not other overhead like rents, underwriting costs, and provisions for profit.

The rate is advisory, and insurers can use it as a guidepost for pricing their individual policies. Individual premiums that employers pay will depend on a number of factors, including the pure premium rate, the carrier’s own pricing methodology, and the employer’s claims and claims cost history, location, and industry.

Why the rate is falling

The insurance commissioner’s decision cuts the average published pure premium rate to $1.46 per every $100 of payroll, compared to the current $1.50.

Despite the average rate decrease of 2.6%, individual class codes may see swings as much as plus or minus 25%. Several factors are driving the lower rate decision:

  • Slowing claims cost inflation
  • Falling frequency of claims
  • Lower overall claims costs
  • Stable medical costs
  • Fewer COVID-19 claims
  • Lower claims-adjusting costs.

What insurers are doing

The most recently available industry average level of pure premium rates filed by insurers with the Department of Insurance is $1.71 per $100 of payroll as of Jan. 1, 2023, which is about 14.6% higher than the current published rate of $1.50. In 2022, carriers were charging $1.68 on average.

While the workers’ compensation market remains competitive and rates continue hovering around record lows, the final rate any employer will pay will depend on several factors beyond the pure premium rate. Some employers may see rate increases instead.

Factors that can influence the prices include the employer’s:

  • Industry.
  • Geographical location (employers in Southern California, for example, face a unique claims environment that results in a surcharge).
  • Individual claims experience.


July 2023 – Class Code Changes Okayed by Insurance Dept


If you have staff who work remotely, you’ll want to pay attention to changes that are coming to the workers’ compensation class code you use for them.
Starting Sept. 1, California’s telecommuter class code will finally get its own pure premium rate, that is lower than what’s currently being charged.
Since many people started working remotely after the COVID-19 pandemic began in 2020, the Workers’ Compensation Insurance Rating Bureau created a new telecommuter class code (8871) and tethered its pure premium advisory rate to the 8810 clerical classification for easier administration.
Now, under the Rating Bureau’s workers’ compensation regulatory filing which was adopted by the California Department of Insurance on May 25, code 8871 will receive its own rate, separate from the clerical rate. In fact, the new telecommuter rate will be 25% lower than the clerical rate due to the former’s lower losses and higher average payroll.
If you have remote workers, you’ll want to ensure they are in the telecommuter class code to enjoy the lower premium.

New X-Mod threshold

The approval of the filing also increases the workers’ comp premium threshold for experience rating (being eligible for an X-Mod) to $10,200 from $9,200 to account for wage inflation.

Restaurant classification split

Other changes include splitting the 9079 restaurant classification into six new codes (see box below), effective Sept. 1, 2024.
While there will be six codes, they will still be combined for rate-making purposes until the Rating Bureau collects a few years of data from the new codes, so that it can set individual rates
for each of them.


January 2023 – Top 10 California Laws, Regs for 2023


A slew of new laws and regulations that will affect California businesses are taking effect for 2023.

Last year was a busy one, with ground-breaking new laws on employee pay disclosures, a law prohibiting discrimination against cannabis-using employees and another expanding the circumstances when employees can take leave to care for a loved one. The following are the top 10 laws and regulations that employers in the Golden State need to stay on top of.

1.  Pay disclosure

This sweeping law in part requires more disclosure of pay information by employers. Under current law, employers are required to provide the pay scale for a position upon reasonable request by a job applicant. SB 1162 goes a step further by:

  • Requiring employers, upon request by a current employee, to provide the pay scale of the position they are employed in.
  • Requiring employers with 15 or more workers to include pay scale in any job postings for open positions.
  • Requiring employers to maintain records of job titles and wage rate history for each employee while employed for the company, as well as three years after their employment ceases.

Note: The law defines “pay scale” as the salary or hourly wage range that the employer “reasonably expects” to pay for the position. Penalties range from $100 to $10,000 per violation. This law took effect Jan. 1, 2023.

 

 2.  State of emergency and staff

This new law, SB 1044, bars an employer, in the event of a state of emergency or emergency condition, from taking or threatening adverse action against workers who refuse to report to, or leave, a workplace because they feel unsafe. “Emergency condition” is defined as:

  • Conditions of disaster or extreme peril to the safety of persons or property caused by natural forces or a criminal act.
  • An order to evacuate a workplace, worksite or worker’s home, or the school of a worker’s child due to a natural disaster or a criminal act.

SB 1044 also bars employers from preventing employees from using their mobile phones to seek emergency assistance, assess the safety of the situation or communicate with another person to confirm their safety. The law, which took effect Jan. 1, 2023, does not cover first responders and health care workers.

 

3. Cannabis use and discrimination

This law bars employers from discriminating in hiring, termination or other conditions of employment based on employees using cannabis while off duty. The bill’s author says the legislation is necessary because THC (tetrahydrocannabinol), the active ingredient in marijuana, can stay in a person’s system after they are no longer impaired. As a result, drug testing may detect THC in an employee’s system even if they used it weeks earlier and it is having no effect on their job performance. AB 2188 does not require employers to permit employees to be high while working. The bill would exempt construction trade employees and would not preempt state or federal laws that require employees to submit to drug testing. This law takes effect Jan. 1, 2024.

4.  Leaves of absence

The California Family Rights Act and the state’s paid sick leave law allow employees to take leave to care for a family member, defined as a spouse, registered domestic partner, child, parent, parent-in-law, grandparent, grandchild or sibling. The definition has been expanded to include “any individual related by blood or whose association with the employee is equivalent of a family relationship.”

5.  Contractor workers’ comp

Starting July 1, the following contractors must carry workers’ compensation coverage regardless of if they have employees or not:

  • Concrete (C-8 license)
  • Heating and air conditioning (C-20)
  • Asbestos abatement (C-22), and
  • Tree service (D-49).

Starting Jan. 1, 2026, all licensed contractors must have coverage.

6.  OSHA citation postings

Under current law, employers that receive citations and orders from OSHA are required to post them in or near the place the violation occurred, in order to warn employees about a potential hazard. Starting Jan. 1, 2023, they must post the notice not only in English, but also: Spanish, Chinese (Cantonese, Mandarin), Vietnamese, Tagalog, Korean, Armenian and Punjabi.

7.  Permanent COVID standard

Cal/OSHA has a permanent COVID-19 prevention standard that will sunset in 2024. The new standard, which replaces the temporary emergency standard the agency had implemented, should provide more certainty for prevention procedures and practices. Here are the main takeaways:

  • Employers are no longer required to pay employees while they are excluded from work due to COVID-19, or to screen employees daily.
  • Employers must still notify and provide paid testing to employees who had a close contact in the workplace.
  • Employers can now incorporate written COVID-19 procedures into their Injury and Illness Prevention Programs.

8.  CalSavers expanded

SB 1126 requires any person or entity with at least one employee to either provide them with access to a retirement program like a 401(k) plan or enroll them in the state-run CalSavers program. Prior to this new law only companies with five or more employees that do not offer a retirement plan are required to enroll their workers in CalSavers.

9.  Bereavement leave

Employers with five or more workers are required to provide up to five days of bereavement leave upon the death of a family member, under a new law starting in 2023. This leave may be unpaid, but the law allows workers to use existing paid leave available to them, such as accrued vacation days, paid time off or sick leave. Employers are authorized to require documentation to support the request for leave.

10.  PFL wage replacement

This law was passed last year but does not take effect until 2025. Existing California law allows employees to apply for Paid Family Leave and State Disability Insurance, both of which provide partial wage replacement benefits when employees take time off work for various reasons under the California Family Rights Act. Starting in 2025, low-wage earners (those who earn up to 70% of the state average quarterly wage) will be eligible for a higher percentage of their regular wages under the state’s PFL and SDI benefit programs.


October 2022 – Big Changes for Dual-Wage Class Codes


AS INFLATION drives up salaries in all sectors, the workers’ compensation wage thresholds for construction dual class codes have increased in California as of Sept. 1, 2022.
State Insurance Commissioner Ricardo Lara in July approved the recommendation by the Workers’ Compensation Insurance Rating Bureau to increase the wage thresholds for highwage workers.
The new rates apply to workers’ comp policies that incept on or after Sept. 1.
In these dual class codes, workers’ compensation rates are different for workers above and below the wage threshold.
Rates are lower for workers whose hourly pay is above the threshold as statistics have shown higher-paid workers in these fields have fewer workplace injuries than those who are paid less.
Often the difference in premium rate between the workers who fall above and below the threshold can be significant.
Opposite are the new thresholds for each class code, that are now in effect.


July 2022 – Rating Bureau Recommends 7.6% Rate Increase


THE WORKERS’ Compensation Insurance Rating Bureau of California is recommending that advisory benchmark workers’ compensation rates increase an average of 7.6% starting Sept. 1.
The proposal comes as the economy heats up and workplace injuries increase, all while COVID-19 workers’ compensation claims continue growing in number. The recommendation stilll needs to be approved by Insurance Commissioner Ricardo Lara, who last year rejected a proposed rate hike and instead ordered a cut.
However, because the benchmark rates – also known as the pure premium rate – are advisory only, insurers are free to price as they feel fit so the full effects will vary from employer to employer and some may see rate decreases.

What’s happening

The Rating Bureau says there are number of factors that are contributing to the increasing rates, including:
• An overall claims costs increase,
• Expected increases in the frequency of workplace injuries and claims,
• A rise in claims adjusting costs,
• Wage increases (part of workers’ comp includes replacement of a portion of wages via temporary and permanent disability payments), and
• Expected future costs of COVID-19 workers’ compensation claims.

 

Since the pandemic started, insurers have been barred from considering COVID-19 workers’ comp claims when calculating an employer’s claims history.
But that exemption will come to an end on Sept. 1. So, the WCIRB is including a 0.5 percentage point provision for the projected costs of future COVID-19 claims in the coming year.

The effects of wage hikes are also expected to increase claims costs. Payouts for lost wages while sick workers recuperate are expected to rise more than 11% by 2024.
Medical costs per claim are projected to increase about 6.5% from $29,896 as of Dec. 31, 2021, to $31,847 at year-end 2024.

The next step

The WCIRB has submitted the proposal to the Department of Insurance, which will hold a hearing on June 14, during which actuaries representing employers and labor will make counterproposals, which are usually lower than the bureau’s. After that, the state insurance commissioner can approve the proposal or reject it and order his own rate increase or decrease. Last year the WCIRB proposed a 2.7% hike, and Lara rejected it and instead ordered a decrease of 3.3%.

And remember: A number of factors go into calculating your insurance rate,
including your industry, your history of claims and your geographic location.


October 2021 – Worker’s Compensation – COVID-19 Payroll Reporting Rules Have Ended


THE WORKERS’ Compensation Insurance Rating Bureau’s two temporary payroll reporting rules to reflect changes brought on by the COVID-19 pandemic stay-at-home orders have sunsetted.

The move came after Gov. Gavin Newsom’s June 9 executive order which revoked the statewide stay-at-home order that had been in place since March 19, 2020.

You may recall that after the stay-at-home order took effect, the Rating Bureau issued new rules for classifying staff who were suddenly working remotely, as well as payroll reporting for staff who were at home but not working.

The Coronavirus Disease 2019 (COVID-19) rules that expired are:

A. Classifying remote workers in the Classification 8810 – Clerical Office Employees – As a result of the California stay-at-home order, many employers altered employees’ duties so they could be accomplished from home, and often those duties were clerical-like in nature.

Under the rule, an employee could be assigned payroll Classification 8810 if:
• Their duties met the definition of a “clerical office employee” while working from home,
• Their payroll for the balance of the policy period was not assignable to a standard classification that specifically excludes clerical office employees.

B. Salaries of non-working staff – Salaries paid to workers who were at home not working, yet still collecting a paycheck, would be excluded from payroll for workers’ comp premium calculation purposes when the payments were less than or equal to the employee’s regular rate of pay

Expiration: This rule expired 60 days after the end of the stay-at-home order, or Aug. 10. 

The takeaway

What this means is that if you have been classifying remote workers under Classification 8810, they will need to be returned to their original classification. Also, the rules still require that you maintain records that document any changes in duties for your staff during the period these rules were in effect and they were working from home.
The rules also require you to maintain records of their payroll during that period.


July 2021 – Workers’ Compensation – New Changes to X-Mods, Classification Rules


INSURANCE COMMISSIONER Ricardo Lara has approved a regulatory filing that will change the premium threshold for employers to qualify for an experience modifier (X-Mod).

The approval was part of a larger regulatory filing the Workers’ Compensation Rating Bureau made to also change expected claims costs, eliminate a few class codes and make new rules for companies that operate multiple enterprises.

The approved filing also updates expected claims cost rates for all 500-plus worker class codes that are used to calculate workers’ comp rates. Here’s a rundown of the changes:

X-Mod change

Currently, the minimum premium an employer must pay annually to receive an X-Mod is $9,900, but that is falling to $9,500, starting Sept. 1. That means any employer that has an annual premium of $9,500 starting on that date will be “experience rated.” The X-Mod is a number used by insurance companies to either discount or increase the premiums you pay for workers’ compensation insurance. It is based on your company’s workers’ comp claim history and reflects the most recent three years.

Multiple enterprises rule

The new rules make changes to what is known as the “multiple enterprises rule,” which applies to companies that have two or more operations that perform work that is classified differently. In those cases, the distinct operations must be classified under the multiple enterprises rule.

In the new rule, separation is the key requirement. If distinct operations are physically separated, each distinct location shall be separately classified.

Separation can be separate operations:
• Located in separate buildings,
• Located on separate floors of a building, or
• Separated by walls if they are on the same floor.
However, if two or more of the distinct operations are not physically separated, they must be assigned to the highest-rated classification applicable to the operations conducted in the common workspace.

The rule also addresses personnel that may float between multiple enterprises, performing different types of work at each operation.
Under the rule, such an employee’s work may be divided into two classifications. If you plan to classify them this way, make sure to keep accurate and complete records supported by time cards or time book entries that show how much time they spent performing each distinct work task for each entity.

If the employer fails to keep those records, the entire pay of the worker will be assigned to the highest-rated classification applied to any part of the work they perform.

Classification changes

There are also changes being made to some construction classes.
The 8110 – Stores Welding supplies classification is being eliminated and covered operations will be reassigned to 8010 – Stores hardware, electrical or plumbing supplies. Also, the iron or steel erection classes 5057 and 5059 will be eliminated, as well as subclasses 5102(3), 5040(2) and 5040(3).

Operations in those eliminated classifications will instead be assigned into one of two consolidated classes:
• 5040 – Structural Iron or Steel operations, or
• 5102 – Iron, Steel, Brass, Bronze or Aluminum Erection – non-structural.


Worker’s Compensation – COVID-19 Prompts Rate Hike Recommendation – OCTOBER 2020


THE COVID-19 pandemic seems to have reversed years of falling workers’ compensation rates in California, as the Workers’ Compensation Insurance Rating Bureau has recommended that average benchmark rates be increased by 2.6% for 2021.
The recommendation was forwarded to the California Department of Insurance, which will schedule a hearing on the recommendation in the fall.
It should be noted that the 2.6% increase recommendation would be an average across all class codes, as the Rating Bureau plans to allocate the expected COVID-19 costs by weight across the state’s overall industrial sector. Note that even low exposure classes will be surcharged.
The Bureau in its recommendation aims to apply the surcharge on a weighted basis according to each class code’s share of growing COVID-19 claims costs. It is considering a tiered surcharge model based on an employer’s risk, as follows (for examples, see below):

High risk – A 12-cent surcharge per $100 of payroll.
Medium risk – A 6-cent surcharge per $100 of payroll.
Low risk – A 4-cent surcharge per $100 of payroll.

 

The X-factor


The Bureau’s actuarial committee noted that the pandemic does present challenges for predicting workers’ compensation costs. “The 2021 policy year will still be impacted by COVID-19, but some trends may stabilize. The challenge will be projecting exposure and claims frequency (for COVID-19 claims),” the committee wrote in a report. Actually, the overall effect of COVID-19 on rates going into 2021 was 4%, according to the Rating Bureau. Had it not included the COVID-19 surcharge, it would be asking for a 1.3% decrease in benchmark rates.

The reason is that claims costs and claims frequency have been falling and long-term claims are costing less than originally anticipated. The Bureau also forecasts that the recession caused by the pandemic will also have a profound effect on overall claims: it projects an overall 6.3% decrease in claims frequency due to slowing economic conditions.

Interestingly, COVID-19 claims are not supposed to count against employers’ experience rating and loss histories, according to new rules that took effect in May. However, the claims are having an overall effect in terms of workers’ comp benefit payments. The Bureau also has to price in the uncertainty over the future of COVID-19. Will it get worse, or will it begin to wane? Will there be a vaccine and new and improved treatment regimens that reduce mortality or decrease symptoms and hospitalizations?

It is concerned that some low-risk industries may be getting a surcharge that is still out of proportion to their actual risk, particularly with people who are working remotely. It plans to further study the issue and will likely amend the filing depending on the results.


New Law Creates COVID-19 Claim Framework – OCTOBER 2020


GOVERNOR GAVIN Newsom has signed legislation that creates a new framework for COVID-19- related workers’ compensation claims. SB 1159 replaces an executive order that Newsom made on March 18 that required all employees working outside the home who contracted COVID-19 be eligible for workers’ compensation benefits if they file a claim. The new law expands that rebuttable presumption” that a coronavirus case is work-related to front-line workers, as well as employees in workplaces that have had an outbreak of cases. The new law is retroactive to July 6, the day after Newsom’s executive order expired, and is set to expire Jan. 1, 2023.  Employers with fewer than five employees are exempt under the statute.

SB 1159’s three parts

Part 1. The law codifies Newsom’s prior executive order that provided a “rebuttable presumption” that COVID-19 was contracted in the scope and course of work by employees working outside of the home who get infected.

Part 2. The law provides a rebuttable presumption that firefighters, law enforcement officers, health care workers and home care workers who contract COVID-19, contracted it in the workplace.

Part 3. The law creates a rebuttable presumption that a worker’s COVID-19 diagnosis is work-related within 14 days of a company outbreak. Under SB 1159, an outbreak is defined as when four employees test positive at a specific place of employment with 100 or fewer employees and, for larger places of employment, when 4% of the employees test positive. It’s also deemed a workplace outbreak if the employer had to shut down due to the coronavirus.

Rebutting a claim

Employers can rebut the presumption that COVID-19 was contracted at work if they have:
• Proof of measures they put in place to reduce potential transmission of COVID-19,
• Evidence of the employee’s nonoccupational risks of contracting COVID-19,
• Statements made by the employee, or
• Any other evidence normally used to dispute a work-related injury.

REPORTING REQUIREMENTS

When an employer learns of an employee testing positive, they must report to the insurer the following information within three business days:
• The date the employee tested positive.
• The address or addresses of the employee’s specific place(s) of employment during the 14-day period preceding the date of their positive test.
• The highest number of workers who reported to work in the 45-day period preceding the last day the employee worked at each specific site.

Filing False Information Can Result in a $10,000 Fine

The Rossi Law Group has the following recommendations for employers in California:
• Keep track of all locations each employee works at, the number of employees on each day at each location, as well as a log of those that test positive (including the date the specimen was collected).
• If you are aware of any staff who have tested positive between July 6 and Sept. 17, you have 30 days after Sept. 17 to report the positive test to the claims administrator.
• You must also report to the insurer positive COVID-19 results for employees that are not filing claims. In that case, you must omit personal identifying information of the employee.
• Provide any factual information to the claims administrator that could help rebut any claim of work-relatedness.

The law also has some teeth: Anyone who submits false or misleading information shall be subjected to a civil fine up to $10,000.

One last thing…

The governor also signed into law AB 685, which requires employers to report an outbreak to local public health officials. Employers must also report known cases to employees who may have been exposed to COVID-19 within one business day.


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