California employers are protesting a part of the Workers’ Compensation Insurance Rating Bureau’s 2017 rate filing dealing with first aid claims, asking the insurance commissioner to delay adoption.
Businesses say the proposed reporting provisions are unclear and inappropriate in light of impending changes that will exempt the first $250 of every claim from the experience rating calculation.
Many employers simply do not report first aid claims in order to keep their experience modifier down, even though the Rating Bureau requires them to do so. Beginning in 2017, frequency will become a major part of the formula for calculating X-Mods.
Under state regulations, employers are required to report injuries that require first aid and are not severe enough for the employee to seek medical treatment or miss work. But despite the rules, few employers report the claims to their insurance companies.
The Rating Bureau hopes that creating an exemption in the experience rating plan for first aid claims and injuries would increase reporting.
The Rating Bureau’s filing for 2017 would also usher in a new system for calculating X-Mods, and also recommends that workers’ comp benchmark rates be cut by 2.6% from July 1 levels, and by 7% from levels on Jan. 1, 2016.
The proposed regulations in question update the definition of medical-only claims and the rules for reporting these losses. They define a first aid claim as an injury where there is no indemnity and only medical costs.
The added language states that this is a claim “regardless of whether the cost of medical treatment, including first aid, is paid by an employer or insurer, or regardless of whether a Workers’ Compensation Claim Form is filed.”
Bruce Wick, director of risk management for the California Professional Association of Specialty Contractors, who also serves as an employer member of the Rating Bureau’s governing board, wrote a letter to Insurance Commissioner Dave Jones, asking him to delay approving the new first provisions.
“The laws involving first aid claims are confusing. Federal OSHA regulations, state OSHA regulations, state labor law regulations, and the Insurance Code all have overlapping and underlapping information,” Wick wrote. “Trying to clarify existing [Unit Stat Reporting] regulations when there is still uncertainty in these other areas, doesn’t seem to help.”
He asked Jones to “either delay approving this part of the filing until the first aid reduction plan is implemented in 2019, or in the alternative, strongly encourage the WCIRB to expedite the implementation of the first aid reduction plan so it could take effect in 2018.”
When employers fail to report first aid claims it causes problems for claims adjusters, hinders workers’ ability to access workers’ comp benefits and has a negative impact on the employers that play by the rules and report all of their claims.
The Rating Bureau estimates that the $250 threshold would eliminate some 15% of claims in the system.
The Bureau expects that at the $250 threshold, the change would mostly affect employers who have no other claims and that it would push up their X-Mod by just one percentage point on average.