Over 80,000 employers in California are covered by “The Fund.” While most people are working, many more unable to work are currently receiving disability benefits, ranging from total temporarily disabled to permanently disabled with a percentage. Worker’s Compensation insurance is something that every business operating in California must have, if the company has even one employee, to pay for any possible injuries sustained while on the job, from either physical, psychological or environmental causes. Beginning on January 1st, 2011, overall policy rates for the largest insurer of last resort in California, will be raised by 5.2% to account for cost inflations. How do you think the other smaller worker’s compensation insurance carriers will follow? Oh, and by the way, the SCIF rates were increase another 5% just this last year beginning on January 1st, 2010. Have you paid enough yet? What does this mean to small businesses? That is yet another 5.2% per employee, per year, that they need to earn, to pay for increasing financial costs to purchase the policy they need in order to operate their company effectively.
It’s amazing to see how blind people are to the “rising costs” of healthcare when cost control could be immediately felt with a Public Option. A single payer. Sure call it nationalized health care. Socialized Medicine. Universal Health Care Coverage. Whatever. People and families, who are alive and can be kept alive and healthy, are much less expensive to maintain than a system where people ignore their health, or simply cannot afford time off work to be sick, or injured. Is it really fiscally efficient, or responsible, to have someone see several different doctors at different offices just because their injury occurred at home, or at work, or on the way to work, or on vacation? Are any of these medical records easily shared with patients, or between service providers? Nope.
But what is the point of having Worker’s Compensation insurance if there was a public option, a real social security? Isn’t there Social Security, Unemployment benefits, employer paid health insurances, HMO, PPO, maybe concierge doctors for the wealthy, cancer specialists, hospitals, and general doctors pretty much everywhere, willing to help you when you need their services for cash or barter even in the right locale? Not really if you get hurt on the job. Especially if you are self represented, in pro-per, and no lawyer is willing to spend their time to help you procure medical services or move your case forward for a possible 15% payout once the case settles, which could be 10+ years after many off record visits to the WCAB, before Worker’s Compensation Administrative Law Judges that are not helpful or willing to listen to a lone patient’s science backed arguments. When was the last time you heard of the California State employed Worker’s Compensation Judges, or Appeals Board employees, or Information and Assistance Officers get a raise, or added extra office staff to move things along any better?
With a consistent unfairness of business practices, by a quasi-state agency, which provides health care, it has to constantly create an ever expanding profit to itself, lawyers, and associated business partners. This year State Fund is going to expand it’s business by offering more insurance brokers increased commissions on policies sold on new business. It is currently paying 8% commissions and plans to increase this to 10% to 12%. With this expansion, the Fund will request that the brokers be recognized as brokers of record on the policies creating another layer in an already jumbled legal nightmare of the Worker’s Compensation Industrial Complex. The costs of 3% more of the policy for being recognized as the brokers of record will be passed along to their customer. While any company who purchases directly from SCIF will receive a 3% credit, as The Fund would be the broker. What’s the point of having brokers, middle men, and more hands to pay out to?
The old 8% rate is according to the Workers Comp Executive Newsletter.
SCIF is also now adjusting their merit ratings system which currently stifles competition among small to large companies. Merit ratings are a form of a discount on the insurance policies. The current higher merit ratings on larger accounts allowed for premiums being paid by larger policy holders to be as much as much as 50% less per $100 of payroll than small accounts. State Comp has been giving merit ratings of 40% to employers with premiums of more than $100,000 while only offering 25% to businesses that had minimum premiums of $25,000. How is this by any means fiscally responsible with annual policy rate increases?
Tom Rowe, President and CEO of State Fund, said in a prepared statement, “We consulted with industry groups and brokerages, including IBA West and the Alliance of Insurance Agents and Brokers, and appreciate their support and advice as we worked through these strategies. Our goal is to listen to our customers and provide as much flexibility as possible in our products and services, reflecting the diversity of California’s businesses. We know the past several years have been very hard on this state. We believe these changes will make us a stronger partner for California businesses.”
The full State Compensation Insurance Fund press release can be read here.
