Oakland, CA – Workers’ compensation claim frequency among California’s private self-insured employers hit the highest level since 2007 last year as both medical-only and indemnity claim volume rose according to a California Workers’ Compensation Institute (CWCI) review of initial data from the state Office of Self-Insurance Plans (OSIP).
OSIP’s annual summary of private self-insured data, issued July 14, is the first snapshot of California private, self-insured claims experience for cases reported in 2021. It includes the total number of covered employees, medical-only and indemnity claim counts, and total paid and incurred losses on those claims through the end of the year.
The latest summary reflects the experience of private self-insured employers who covered 2.39 million California employees last year (vs. 2.34 million in the 2020 initial report) and who reported 93,430 claims in 2021, 8% more than the 86,503 claims noted in the 2019 initial report.
The breakdown by claim type shows private self-insured employers reported 48,766 medical-only claims in 2021 (up 11.4% from 43,799 in 2020, the first year of the pandemic), though that was still 5.7% below the pre-pandemic total of 51,545 claims in 2019). Indemnity claim volume, on the other hand, increased in both of the last two years, climbing from 34,307 claims in 2019 to 42,724 claims in 2020, then climbing to 44,664 claims last year.
The latest claim count translates to an overall frequency rate of 3.92 claims (2.05 medical-only and 1.87 indemnity) per 100 private self-insured employees, the highest combined rate since 2007, with indemnity claim frequency reaching the highest level in at least 15 years.
The increase in claim volume and claim frequency helped drive up first report total paid and incurred losses. The OSIP data show paid losses on the 2021 private self-insured claims through the fourth quarter totaled $314.8 million, 17.3% more than the first report total for 2020, as total paid indemnity (primarily temporary disability payments) climbed by $22.2 million (16.3%) to $158.7 million, and total paid medical increased by $24.3 million (18.4%) to $156.1 million.
Meanwhile, total incurred losses (paid benefits plus reserves for future payments) rose to $839.8 million, up $97.4 million, or 13.1% from the comparable 2020 figure, as total incurred indemnity at the first report increased by $36.8 million (12.0%) to $342.6 million and total incurred medical increased by $60.6 million (13.9%) to $497.2 million. Aside from the higher claim volume, increases in the average paid and incurred losses at the first report also contributed to the growth in total paid and incurred losses, as both hit all-time highs in 2021, increasing to $3,370 and $8,988 respectively.
OSIP’s summary of private self-insured’s calendar year 2021 data, follows the December 2021 release of public self-insured claims data for fiscal year 2020/2021. OSIP private and public self-insured claim summaries from the past 20 years are posted at http://www.dir.ca.gov/SIP/StatewideTotals.html.