State Compensation Insurance Fund has filed for an 8.9% workers’ compensation rate increase. It is a slap in the face to Insurance Commissioner Steve Poizner, who issued an advisory rate of 5%. The increase comes like a tax on California employers in industries such as construction, manufacturing, trucking, retail, and service industries who are already hurting from the struggling economy and under the threat of new taxes in California.

The higher rates go into effect for policies incepting and renewing January 1, 2009.

State Fund says premiums for individual employers will be based on the experience of their particular rating class and experience modification. Some classes could see even higher rates. State Fund cites the major driver of the increase as medical inflation. It says that over the last two years medical costs have been rising at a rate of 12% per year, according to the Workers’ Compensation Insurance Rating Bureau.

State Fund bemoans the fact that it has to file for an increase saying that its premiums have dropped precipitously since 2003. With employers struggling to keep workers comp costs down and preserve jobs, State Fund will make it much harder on those industries hardest hit.

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