The California Insurance Commissioner issued a decision regarding the WCIRB’s January 1, 2017 Regulatory Filing which was submitted to the California Department of Insurance (CDI) on June 28, 2016 and subject to a public comment period that ended on September 28, 2016. In the Decision, the Commissioner approved all of the WCIRB’s proposed changes effective January 1, 2017 to the California Workers’ Compensation Uniform Statistical Reporting Plan – 1995 (USRP), Miscellaneous Regulations for the Recording and Reporting of Data – 1995 (Miscellaneous Regulations), and California Workers’ Compensation Experience Rating Plan – 1995 (ERP) with one exception.
A number of clarifying changes to Classifications 5474(1)/5482(1), 5506, 6218(2)/6220(2), 5507 and 8227 were not approved due to a pending appeal before the CDI Administrative Hearing Bureau.
The proposed amendments would define first aid claims and require that they be included in insurer reporting. First aid claims have been a longstanding concern because some insurers do not report first aid claims as currently required under the USRP, which, according to the CDI, gives their policyholders an unfair advantage in the market.
The current regulations do not specifically mention first aid claims; thus, some insurers have interpreted the regulations to mean that they need not report medical payments for first aid claims. However, the USRP does not provide any exceptions that would enable insurers to refrain from reporting any medical loss, including first aid medical losses. The confusion may stem from the fact that first aid claims are treated differently than indemnity claims under the Labor Code in the workers’ compensation system. The proposed amendments clarify the existing obligations to report all claims and will enhance the WCIRB’s ability to properly account for first aid claims when determining appropriate statewide experience modifications.
The WCIRB’s planned study regarding whether to exempt a certain amount of medical loss from the reporting requirements may or may not come to fruition in 2019; thus, there is no basis to conclude that the market will benefit from delaying implementation. Also, the WCIRB’s inability to quantify the extent to which insurers underreport claims underscores the immediate need for the implementation of these amendments, which will clarify the regulations to all insurers and policyholders and foster the proper reporting of all claims, in furtherance of a fair and equitable system.
All the proposed amendments to the ERP including the WCIRB’s proposed 2017 rating values to be used in the computation of 2017 experience modifications in accordance with the variable split experience rating formula adopted by the Commissioner in 2015 to be effective January 1, 2017. The approved 2017 experience rating eligibility threshold is $10,100. (View the approved revised tables.)
The WCIRB is in the process of updating the USRP, Miscellaneous Regulations and ERP. Once complete, these documents will be posted to the Publications and Filings page of the WCIRB website. In the interim, the WCIRB has prepared the2017 Quick Reference Guide summarizing the approved changes to the Commissioner’s regulations.
The Decision pertains only to the WCIRB’s Regulatory Filing and does not include amendments to advisory pure premium rates. Changes to advisory pure premium rates were proposed in the WCIRB’s amended January 1, 2017 Pure Premium Rate Filing submitted on October 3, 2016.