State Regulators Release 2014 California Workers Comp User Funding and Assessment Rates

The California Department of Industrial Relations (DIR) has calculated the 2014 assessments that state law requires workers’ compensation insurers to collect from policyholders to cover the budget of the state Division of Workers’ Compensation (DWC) and five related programs set up by state lawmakers. The assessments and surcharges cover the Workers’ Compensation Administration Revolving Fund; the Uninsured Employers Benefits Trust (UEBT) Fund; the Subsequent Injuries Benefits Trust (SIBT) Fund; the Occupational Safety and Health Fund; the Labor Enforcement & Compliance Fund; and the Workers’ Compensation Fraud Account.  Insurers should apply the following rates against their policyholders’ estimated annual assessable premium for policies incepting January 1, 2014 through December 31, 2014: 

2014 WC Administration Revolving Fund Assessment/User Funding: 0.012247
2014 Uninsured Employers Benefit Trust Fund Assessment: 0.001603
2014 Subsequent Injuries Benefits Trust Fund Assessment: 0.001291
2014 Occupational Safety & Health Fund: 0.002166
2014 Labor Enforcement & Compliance Fund 0.002452
2014 WC Fraud Account Assessment: 0.002544

Assessable premium is the premium an insured is charged after all rating adjustments (experience rating, schedule rating, premium discounts, expense constants, retrospective rating, etc.) except adjustments resulting from the application of deductible plans or the return of policyholder dividends. Insurers must advance the money to the state on behalf of policyholders, then recoup the funds via policy surcharges and assessments. The first installment is due to the state on or before January 1, 2014; the balance is due on or before April 1, 2014, and payments may be made by Electronic Funds Transfer (EFT) or by check.

To cover their portion of the 2014 assessments, self-insured employers must apply the following rates against the total amount of WC indemnity paid and reported on their Self-Insurer’s Annual Report. 

2014 WC Administration Revolving Fund Assessment: 0.041342
2014 Uninsured Employers Benefit Trust Fund Assessment: 0.006202
2014 Subsequent Injuries Benefits Trust Fund Assessment: 0.004461
2014 Occupational Safety & Health Fund: 0.007302
2014 Labor Enforcement & Compliance Fund: 0.008186
2014 WC Fraud Account Assessment: 0.008934

More details are included in a DWC Newsline posted under “What’s New” at www.dir.ca.gov/dwc/ and in the memo that DIR has mailed to workers’ compensation insurers and self-insured employers along with invoices for each company’s share of the assessments and surcharges. Questions about the 2014 surcharges and assessments should be directed to DIR Accounting Administrator Amadeo Urbano (AUrbano@dir.ca.gov); 415-703-4014; or analyst Naomi Carter (NCarter@dir.ca.gov; 415-557-1020).