Indemnity up for injured workers in California: Report

Average income-replacement payments for injured workers in California increased 8.9% from 2012 to 2016 and soared up 17.3% from 2016 to 2020 before leveling off in 2021, according to research published Wednesday by the California Workers’ Compensation Institute on trends in average benefit payments.

CWCI reports that average medical payments started declining two years before cost-reducing S.B. 863 was adopted in 2012 and continued through 2016, a post-reform legislation trend that coincided “with the adoption of enhanced medical dispute resolution tools such as (utilization review) and (independent medical review), the beginning of the transition to the (Resource-Based Relative Value Scale) fee schedule, and a decline in spinal surgeries and opioid use.”

Average medical payments bottomed out in 2016, increased by 16.2% over the next four years then leveled off in 2021.

On Indemnity, the increases “were not unexpected, given that weekly maximum (temporary disability) rates rose more than 34% between 2012 and 2021 to reflect changes in the state average weekly wage, fueled in part by the passage of (state law) in 2016, which increased the state’s hourly minimum wage from $10 in 2016 to $15 in 2022, and S.B. 863 (which) mandated increases in (permanent disability) benefits,” CWCI said.

CWCI also reported some variation in trends among different industries.

Average indemnity payments for the transportation and warehousing industry increased 2.8% from 2012 to 2016 and 25.5% from 2016 to 2020, then fell 12.1% from 2020 to 2021. Average indemnity for health care and social assistance increased 7.3% from 2012 to 2016, 8% from 2016 to 2020 and another 10.9% from 2020 to 2021.

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