Even with the volume of job injury claims reported by California public self-insured entities hovering near a 10-year low last year, total paid and incurred workers’ compensation claim costs for cities, counties and other public agencies in the state remained near their 10-year highs according to a California Workers’ Compensation Institute (CWCI) analysis of data from the Office of Self-Insurance Plans (OSIP).
The OSIP summary of public self-insured data for fiscal year 2011/2012, dated March 5, provides the first snapshot of public self-insured claims experience – including the number of claims, total loss payments and total incurred (paid losses plus reserves) -- for the 12 months ending June 30, 2012. The agency compiles the data annually from reports submitted by hundreds of public self-insured entities other than the state itself, including cities and counties, local fire, school, transit, utility and special districts and joint powers authorities. The new summary shows that in FY 2011/2012, these employers provided workers’ compensation coverage to 1.9 million California public workers whose wages and salaries totaled $96 billion for the year.
CWCI compared the latest results to those included in the initial report from the prior year and found almost no change (-0.3%) in the number of employees covered by public self-insured employers. Likewise, overall public self-insured claim frequency held steady at 6.2 claims per 100 employees, with no change in the incidence of either medical-only or indemnity claims. Though claim frequency was unchanged, and last year’s first report claim count was the second lowest tally of the last decade, public self-insured employers’ paid losses for FY 2011/2012 still amounted to nearly $340 million. That total was within 1 percent of the 10-year high recorded in FY 2010/2011 first reports and was nearly $80 million (or about 30%) more than the post-reform low recorded in the FY 2005/2006 first reports.
Calculating the first report average paid losses by benefit type, CWCI found that the $80 million increase in public self-insured loss payments over the past six years is associated with increased claim severity (average loss per claim) as average paid indemnity at the first report rose nearly 30% from a post-reform low $1,112 in FY 2005/2006 to $1,441 on last year's claims, while over the same period the average paid for medical climbed 32.5% from the post-reform low of $1,073 to $1,422 last year.
The incurred data show a similar pattern, with incurred losses for California public self-insured employers totaling $1.1 billion in the FY 2011/2012 first reports, $244 million (28.6%) more than the post-reform low of $853 million noted in the FY 2005/2006 first reports, even though the number of claims is down. As with the paid loss data, the incurred results indicated that the increase in first report total incurred losses over the past 6 years are associated with rising claim severity, as the average incurred indemnity at first report jumped 19.5% from $3,106 in FY 2005/2006 to $3,713 last year, while average incurred medical at first report on public S-I claims rose more than 36% from $4,065 to $5,539.
CWCI’s analysis of the OSIP public self-insured data tracks changes in the volume and frequency of California public self-insured claims, and examines the 10-year trends in the total and average paid and incurred amounts for these claims. The report, with initial data on FY 11-12 claims reported to OSIP and more developed data (2nd, 3rd, 4th, and 5th reports) for the most recent 10 years available, is in the Research section of the CWCI website, www.cwci.org. OSIP also compiles private self-insured claims data, but those results are reported on a calendar year basis, so updated figures from California’s private self-insurers will be released this summer. OSIP summaries of claims experience for private and public self-insured employers are posted at www.dir.ca.gov/SIP/StatewideTotals.html.