Report: California Employers Pay Highest Workers’ Comp Costs in Nation

Nov 18 2014 - Workers' Compensation - HRWatchdog

​The biennial study by the Oregon Department of Business and Consumer Services has confirmed that California employers pay the highest workers’ compensation costs in the nation — by a wide margin.

California has consistently ranked among the most expensive states in this workers’ compensation rate study for more than a decade; however, California has not been tagged with the No. 1 spot since 2004. The study revealed that California employers pay 188 percent more in workers’ compensation costs than the national median and 33 percent more than the second most expensive state (Connecticut).

Some of the reasons for California’s high workers’ compensation rates include:

  • California has among the highest medical costs per workers’ compensation claim in the nation, and higher-than-average costs per claim for cash benefits. Since 2005, average costs per claim have increased by $30,000.
  • California’s rate of work injury claims per 1,000 workers is 46 percent higher than the national median. Even as the rate in most states has declined, since 2012, California’s “claim frequency” has been increasing. The increases include a higher-than-average rate of “permanent disability” claims and an increase in claims involving cumulative trauma and those filed post-employment, particularly in the Los Angeles region.
  • California’s system generally is more expensive to run because of higher-than-average litigation rates and complex administrative features.

Visit CalChamber’s Top Story page for more information on workers’ comp costs.

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