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The CWCI reports that initial data on fiscal year (FY) 2022/23 public self-insured claims experience in the California workers’ compensation system show that public self-insured’s total claim volume, spurred by a sharp drop in indemnity claims, fell 16.8% in the 12 months ending June 30 of this year, which helped drive down public self-insured total incurred losses for the second time since the pandemic hit, while public self-insured total paid losses fell for the first time since the 2012 workers’ comp reforms were implemented a decade ago.

The annual summary of public self-insured data issued on December 5 by the Office of Self-Insurance Plans (OSIP) offers the first look at the workers’ comp experience of cities, counties, and other public self-insured entities for the 12 months ending June 30 of this year. The summary notes the number of medical-only and indemnity claims filed and the total paid and incurred losses on those claims. Compared to the initial summary from FY 2021/22, the new report shows California’s public self-insured work force increased by 3.4 percent to nearly 2.09 million workers last year, with wages and salaries for those workers totaling just under $162 billion. The public self-insured employers reported 120,328 claims last year, 24,348 fewer than the record 144,676 claims in the FY 2021/22 initial report, prompted in part by the influx of COVID-19 claims among public sector employees.

The distribution of the $510.3 million in total payments on the FY 2022/23 public self-insured claims at first report shows indemnity payments accounted for $317.1 million, $67.0 million (17.4%) less than in the prior year, while medical payments accounted for $193.2 million, $7.7 million (3.8%) less than in FY 2021/22.

However, with far fewer claims last year, that works out to an average benefit payment of $4,241 for the FY 2022/23 claims, 4.9% more than the comparable figure from FY 2021/22. The breakdown of the average payment shows public self-insureds averaged $2,636 in indemnity payments on FY 2022/23 claims, nearly matching the record $2,654 from the prior year’s first report, but average paid medical climbed to $1,605, up 15.6% from FY 2021/22.

The first report data on incurred losses (paid amounts plus reserves for future payments) show a slightly different pattern for public self-insured claim costs. Aggregate incurred losses on the FY 2022/23 claims totaled just under $1.54 billion, 8.3% less than the first report total from the prior year. In this case, the one-year decline in total incurred can be completely attributed to the decline in public self-insured claim volume, as unlike the average paid data, where the average indemnity payments were flat, the incurred results showed sharp increases in both the average incurred indemnity (+7.7%) and the average incurred medical (+12.5%), but the combined impact of those increases was not enough to offset the 16.8% reduction in claim volume, which drove the average incurred loss per claim up from $11,608 in FY 2021/22 to $12,309 in FY 2022/23 (+10.0%).

OSIP also compiles private self-insured claims data, which is reported on a calendar year basis rather than on a fiscal year basis, so the private self-insured data, which was posted in June, now lags the public self-insured data by 6 months. The next report on private self-insured experience should be released next summer. In the meantime, CWCI has issued a Bulletin that includes exhibits and additional details on the most recent public self-insurer paid and incurred losses, including comparative results from the past decade. Institute members and subscribers may access the bulletin by logging in at OSIP’s annual summaries for private and public self-insured employers from the past dozen years are posted online.

This is a correction to the WorkCompAcademy story published on December 18 which had incorrect data and conclusions. May we thank Bob Young at the CWCI for pointing out our mistake. Our apologies to our readers and the CWCI for our incorrect post.