January 18, 2025 | JacobiJournal.com — Public Self-Insured Losses: A new report reveals that, despite a decrease in the number of claims, public self-insureds in California saw a rise in total paid losses last year. This increase was driven by higher average medical and indemnity payments.
Rising Losses in California’s Public Self-Insured Sector
The California Workers’ Compensation Institute (CWCI) reviewed the fiscal year 2023/24 report on public self-insured data. They found that average medical payments surged by 18.7%, while average indemnity payments rose by 5.3%. These increases contributed to a nearly $42.6 million rise in total self-insured losses, which reached $552.9 million last year.
Meanwhile, the number of claims declined by 1.8%. Despite this, total incurred self-insured losses, including both paid and reserved future payments, increased by nearly $150 million, reaching a record $1.69 billion. This rise was driven by a 14.8% increase in average incurred medical costs and a 9.4% jump in average incurred indemnity costs.
Growth in the Public Self-Insured Workforce
The summary, released on January 8 by the Office of Self-Insurance Plans, offers insight into the workers’ comp experience of cities, counties, and other public self-insured entities for the 12 months ending June 30, 2023. The report shows that, compared to the previous year, California’s public self-insured workforce grew by 4.5%, totaling 2.18 million workers. Additionally, wages and salaries for these workers reached nearly $174.2 billion.
The report revealed that public self-insured employers reported 118,114 claims last year. This marks a decrease of 2,214 claims (1.8%) from the previous year’s initial report. Despite this drop, both paid and incurred losses increased.
Distribution of Paid Losses
In FY 2023/24, indemnity payments accounted for $327.9 million of the $552.9 million in paid losses, marking a 3.1% increase from the prior year. Medical payments reached $225.0 million, reflecting a significant 16.5% increase. As a result, the average benefits paid per claim rose to $4,681, a 10.4% increase from the previous year’s claims. Specifically, indemnity payments averaged $2,776, up by 5.3%, while medical payments averaged $1,905, marking an 18.7% increase.
Access Additional Data
For more details on California self-insured losses, CWCI members and subscribers can access the full bulletin, which includes additional exhibits and comparisons with data from the past decade.
The bulletin provides a detailed breakdown of trends in claim types, payment patterns, and demographic shifts among public self-insured entities. It also highlights key factors driving increases in self-insured losses, such as rising medical costs, higher indemnity payouts, and changes in workforce composition.
Analysts and public employers can use this information to benchmark performance, plan budgets, and implement risk management strategies tailored to the evolving landscape of California’s public-sector workers’ compensation system.
For full data and exhibits, visit the California Workers’ Compensation Institute (CWCI) bulletin.
FAQs: California Public Self-Insured Losses
What are California public self-insured losses?
They represent total paid and incurred workers’ compensation costs for public entities like cities, counties, and state agencies.
Why did public self-insured losses rise despite fewer claims?
Higher average medical payments (+18.7%) and indemnity payments (+5.3%) led to a nearly $42.6 million increase in total paid losses.
How many claims were reported by California public self-insured employers?
Public self-insured employers reported 118,114 claims in FY 2023/24, a decrease of 1.8% compared to the previous year.
What impact does this data have for public employers?
Rising losses indicate increased financial exposure, influencing budgeting, insurance planning, and risk management strategies.
What does it mean to be self-insured in California?
In California, a self-insured public entity pays its own workers’ compensation costs instead of purchasing coverage from an insurance carrier. Cities, counties, school districts, and state agencies set aside funds to cover medical treatment, indemnity benefits, and long-term claim obligations. Their annual reports—like the one reviewed by CWCI—show how much they actually paid out and how much future liability they’re reserving.
What are the rules for total loss in California?
For public self-insureds, “total loss” isn’t about damaged property—it refers to the total amount of paid and incurred workers’ compensation losses. These figures include medical payments, indemnity benefits, and projected future costs. California requires public self-insureds to report these totals every year through the Office of Self-Insurance Plans, which tracks trends and financial exposure across the state.
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