CWCI Reviews Initial Data on Private Self-Insureds' 2022 Claim Experience

Thursday, June 22, 2023 | 0

California workers’ comp private self-insured claim frequency rose 6% last year, as both medical-only and indemnity claim volume increased. But a California Workers' Compensation Institute review of initial data from the state Office of Self-Insurance Plans suggests that many of the claims may have been low-cost COVID-19 cases.

Private self-insureds’ average paid and incurred losses both declined as well, so their total paid losses at first report fell 1.2% to $311 million, while their incurred losses fell 3.3% to just under $812 million, according to a new report from CWCI.

The OSIP's summary of private self-insured data, issued June 6, offers a first glimpse at California's private, self-insured claims experience for cases reported in 2022. It notes the total number of covered employees, medical-only and indemnity claim counts, and total paid and incurred losses on those claims through the end of the year.

CWCI said distribution by claim type was almost evenly split, as private self-insured employers reported 52,300 medical-only claims in 2022, up 7.2% from 48,766 in 2021, while they reported 51,978 indemnity claims, up 16.4% from the 2021 first report level. It is the third year in a row that the private self-insured indemnity claim count has risen, as the tally went from 34,307 claims in 2019 (the last year before the pandemic) to 42,724 claims in 2020, then rose to 44,664 claims in 2021 before the addition of 7,314 more indemnity claims last year.

The overall claim count for 2022 works out to 4.31 claims (2.16 medical-only and 2.15 indemnity) per 100 private self-insured employees, the highest rate in at least 16 years, CWCI said.  

Other highlights of the report include:

• Despite increasing claim volume and frequency, first report total paid losses for 2022 fell 1.2% to $311 million, as total paid medical declined by $6.9 million to $149.2 million, (a 4.4% decrease), more than offsetting the $3.2 million increase in paid indemnity, which rose 2% to $161.9 million. 
• The average paid loss on a 2022 claim in the initial report was $2,983, down 11.5% from 2021, as average medical payments per claim fell 14.3% to $1,431, and average paid indemnity fell 8.7% to $1,552. 
• First report total incurred losses on the private self-insured incurred claims, which include paid benefits plus reserves for future payments, also fell in 2022, declining by $28 million (3%) to $811.8 million. 
• There were 112,298 COVID-19 claims in 2022, and 61.2% of those involved self-insured employers, including health care employers such as hospitals and large retailers, many of which are private self-insureds.
• The increased number of inexpensive claims helped drive down private self-insureds’ average incurred medical (-15.9%) and average incurred indemnity (-9.8%) last year, so the total average incurred per claim at first report fell from $8,988 in 2021 to $7,785 in 2022 (-13.4%).  

CWCI members and subscribers may log on to the CWCI website to view a summary with more details, analyses and graphics.