The Workers’ Compensation Insurance Rating Bureau’s governing committee just approved amending the January 2021, pure premium rate filing. It is recommending the application of a six-tier surcharge for COVID-19 costs to next year’s advisory rates.
The surcharge will range from 1 cent to 24 cents depending on the industry’s relative share of the COVID-19 claims filed to date (see chart below). Overall, the surcharge adds 4.1% to a rate indication which would be another rate cut for the system if not for the COVID-19 add-on.
The Bureau is a private organization with quasi-governmental responsibility. It is financially supported exclusively by insurance carriers in whose interests it operates.
The committee rejected a motion by State Compensation Insurance Fund President Vern Steiner to eliminate the surcharge entirely and allow carriers to handle the COVID-19 issues via scheduled rating. He maintained that proposed load punishes the sector hardest hit by the economic fallout from the pandemic – small employers. The motion failed due to the lack of a second by either the insurer or the public members on the committee.
Instead, the committee approved on a 10-1 vote amending the filing to apply surcharges of 1 cent, 3 cents, 6 cents, 12 cents, 18 cents and 24 cents. The surcharge in many cases amounts to a roughly 30% increase over the indicated rate without a specific surcharge. An amended filing is expected by early next week.
The Bureau earlier said it would not apply COVID claims towards experience mods, however the application of a surcharge hits every California employer instead of only those affected with the illness.
|55 - Management of Companies and Enterprises||1||0.01|
|51 - Information||1||0.01|
|54 - Professional, Scientific, and Technical Services||1||0.01|
|8742 - Outside Sales||2||0.03|
|52 - Finance and Insurance||2||0.03|
|8810 - Clerical||2||0.03|
|21- Mining, Quarrying, and Oil and Gas Extraction||2||0.03|
|71 - Arts, Entertainment, and Recreation||2||0.03|
|53 - Real Estate and Rental and Leasing||2||0.03|
|56 - Administrative Support and Waste Mgmt and Remediation Services||3||0.06|
|42 - Wholesale Trade||3||0.06|
|23 - Construction||3||0.06|
|61 - Educational Services||3||0.06|
|31 - Manufacturing||3||0.06|
|22 - Utilities||3||0.06|
|81 - Other Services (except Public Administration)||3||0.06|
|92- Public Administration||4||0.12|
|44 - Retail Trade||4||0.12|
|48- Transportation and Warehousing||4||0.12|
|Physicians, Dentists, and Daycare||4||0.12|
|72 - Accommodation and Food Services||5||0.18|
|11 - Agriculture, Forestry, Fishing and Hunting||5||0.18|
|62 - Healthcare and Social Assistance (excluding Physicians, Dentists, and Daycare)||6||0.24|