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 led to a nearly $42.6 million rise in total paid losses, which reached $552.9 million last year.
Meanwhile, the number of claims declined by 1.8%. Despite this, public self-insured total incurred losses, which include both paid and reserved future payments, increased by nearly $150 million, reaching a record $1.69 billion. This rise was attributed to 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, CWCI members and subscribers can access the full bulletin, which includes additional exhibits and comparisons with data from the past decade.
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