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California Public Self-Insured Paid & Incurred Losses Increase Despite Decline in Claim Volume

Oakland, CA – A California Workers’ Compensation Institute (CWCI) review of the initial report on fiscal year (FY) 2023/24 California workers’ compensation public self-insured data shows that an 18.7% increase in average medical payments and a 5.3% increase in average indemnity payments drove public self-insureds’ total paid losses up nearly $42.6 million to $552.9 million last year even though the number of claims fell by 1.8%. At the same time, public self-insured total incurred losses (paid plus reserves for future payments) jumped nearly $150 million to a record $1.69 billion as average incurred medical rose 14.8% and average incurred indemnity jumped 9.4%.

The summary of public self-insured data issued on January 8 by the Office of Self-Insurance Plans (OSIP) offers the first snapshot of the workers’ comp experience of cities, counties, and other public self-insured entities for the 12 months ending June 30 of last year. The summary notes the number of medical-only and indemnity claims filed and the total paid and incurred losses on those claims. Compared to the initial summary from the prior year (FY 2022/23), the new report shows California’s public self-insured work force increased by 4.5% to 2.18 million workers last year, with wages and salaries for those workers totaling nearly $174.2 billion. The public self-insured employers reported 118,114 claims last year, 2,214 (-1.8%) fewer than in the FY 2022/23 initial report, but despite that decline, both paid and incurred losses were up.

The distribution of the $552.9 million in paid losses on the FY 2023/24 public self-insured claims at first report shows indemnity payments totaled $327.9 million, $10.8 million (3.1%) more than in FY 2022/23, while medical payments totaled $225.0 million, up $31.8 million (16.5%) from the prior year. With claim volume down and loss payments up, average benefits paid in the first reports climbed to $4,681 for the FY 2023/24 claims, 10.4% more than the initial payments on FY 2022/23 claims. The breakdown of the average payment shows public self-insureds averaged $2,776 in indemnity payments on the FY 2023/24 claims, up 5.3% from $2,636 in the prior year’s first report, while average paid medical climbed to $1,905, up 18.7% from $1,605 in the initial report for FY 2022/23.

The first report data on public self-insured incurred losses (paid amounts plus reserves for future payments) show total incurred losses on the FY 2023/24 claims of nearly $1.69 billion, 9.7% more than the $1.54 billion first report total from the prior year’s claims. With both medical-only and indemnity claim volume down, the year-over-year increase in total incurred losses was completely due to the increases in average incurred indemnity (+9.4%) and average incurred medical (+14.2%), which more than offset the 1.8% decline in claim volume, as the average incurred loss per claim jumped 11.8% from $12,744 in FY 2022/23 to $14,279 in FY 2023/24. 

OSIP also compiles private self-insured claims data, which is reported on a calendar year basis rather than on a fiscal year basis, so the private self-insured data, which was posted in June, now lags the public self-insured data by 6 months. The next report on private self-insured claims will be issued next summer. In the meantime, CWCI has issued a Bulletin that includes exhibits and additional details on the most recent public self-insurer paid and incurred losses, including comparative results from the past decade. CWCI members and subscribers may access the Bulletin by logging in at www.cwci.org. OSIP’s summaries of private and public self-insured employers since FY 2000/01 are available at https://www.dir.ca.gov/SIP/StatewideTotals.html.