Things you should know

Inflation could disrupt stable work comp environment - A.M. Best

Credit rating agency A.M. Best's Market Segment Report notes that Workers Compensation generates solid profits but the future remains uncertain. "If inflation causes loss costs to increase, particularly on the medical side, without a commensurate increase in employee wages, rate increases may be necessary to cover the gap."

NCCI begins series on inflation and workers comp medical costs

The National Council on Compensation Insurance (NCCI) published the first report in its series on inflation and workers compensation medical costs. It explores price and utilization trends in medical services in the country's four geographical regions. Major findings:

• Medical inflation in WC has been moderate for the past decade. But with the recent dramatic rise in consumer prices, concerns have emerged about medical inflation rising at similar levels.
• Two factors drive changes in medical claims costs: the price of medical services and utilization, which measures the mix and number of services provided to an injured worker.
• NCCI's most recent medical data shows that drug costs are declining, physician costs are up slightly, and facility costs are rising in the WC system.
• In recent years, facility services are the dominant contributor to changes in WC medical costs across regions - most prominently in the southeastern region. Staffing shortages, lack of competition, increase in surgeries, and increases in medical malpractice insurance premiums are driving costs up.

Takeaway: Employers can help control costs by working with occupational medicine providers, using nurse case managers, and providing alternatives to emergency room care.

Farm and construction worker heat-related injuries

An Oregon State University study found an association between increasing temperatures and increased rates of injury claims that were more pronounced among workers in the agricultural and construction sectors. The rate of injuries is about four percent higher when the maximum heat index exceeds 75 degrees, but incident rate ratio (IRR) for agriculture and construction workers is significantly higher - 14 percent. The IRR increases with rising temperatures were also more pronounced in Ag/Construction workers. When the heat index climbed over 90° F, the traumatic injury risk increased 19 percent to 29 percent above the 65° F baseline.

I-9 forms

The U.S. Department of Homeland Security (DHS) announced that employers should continue to use the current Form I-9 after its Oct. 31 expiration date, until further notice. DHS said it will publish a Federal Register notice to announce the new version of the form once it becomes available. DHS also announced an extension of its temporary policy allowing employers to inspect Form I-9 documents virtually until July 31, 2023.

State News

California

• Governor Newsom signed several bills relating to COVID-19. A.B. 1751 keeps the COVID-19 presumption in place for one more year - until Jan. 1, 2024. S.B. 1127 cuts the window for employers to determine liability on claims for injuries that are presumed compensable when suffered by first responders to 75 days from 90, and employers face penalties of up to $50,000 for unreasonably denying them. It allows firefighters and peace officers to receive up to 240 weeks of temporary disability benefits for presumptive cancer claims rather than the 104 weeks of TD available to other injured workers.
• Governor Newsom vetoed two comp measures: A.B. 334, which would have given peace officers for the Departments of Fish and Game and Parks and Recreation a presumption that skin cancer is compensable, and S.B. 284, which would have included additional firefighters, peace officers, and safety dispatchers in a PTSD presumption that took effect in 2020.
• SB 216 requires concrete, heating and air conditioning, asbestos abatement, and tree service contractors to provide proof of workers compensation coverage for a new or renewal license, regardless of whether they have employees. It also requires by 2025 all licensed contractors in the state carry workers compensation insurance.
• The Division of Workers' Compensation announced an extension of emergency rules allowing remote medical-legal evaluations through Jan. 18, 2023, which is the last time the regulations can be readopted on an emergency basis.
• Workers' Compensation Insurance Rating Bureau (WCIRB) announced that insurers, agents, and brokers who use WCIRB Connect can view the experience modification, or X-mod, for any policy user through the online system.
• The WCIRB has released its COVID-19 in California Workers' Compensation - 2022 Update. In recent months COVID-19 claims have been about 5% of reported indemnity claims.
• The Department of Industrial Relations' Division of Workers' Compensation and its Anti-Fraud Unit suspended 178 medical providers during the first eight months of 2022.

Florida

• Florida Insurance Commissioner David Altmaier, acting on the direction of Gov. Ron DeSantis, signed an executive order prohibiting carriers from canceling any policies between Sept. 28 and Nov. 28 as the state works on repairing damage caused by Hurricane Ian.

Indiana

• Insurance Commissioner Amy Beard approved a 10.3 percent average workers compensation rate cut for policies incepting on or after Jan. 1. Individual employers may experience a different rate change depending on their industrial classification and other factors.

Illinois

• In what is believed to be the first jury verdict on the issue, a federal jury awarded a $228 million verdict in favor of the plaintiff in a class-action lawsuit filed against BNSF Railway Co. under the Illinois Biometric Privacy Act. Richard Rogers v. BNSF Railway Co

Kentucky

• The Department of Insurance approved a recommendation from the NCCI to reduce loss costs by an average of 6.8 percent across all class codes.

Minnesota

• The Workers' Compensation Reinsurance Association (WCRA) is preparing to distribute a $600 million surplus - $383 million will go to insurers, $182 million will be given to self-insurers and $35 million will be divvied up among some 1,000,000 policyholders.

New Jersey

• The Compensation and Rating Bureau (NJCRIB) submitted a filing to the Department of Banking and Insurance seeking a 4.7 percent decrease in the overall premium and rate level effective January 1, 2023.

New York

• The Workers' Compensation Board announced a new process for a schedule loss of use award as well as changes to a related form, EC-81.7.