The California Department of Industrial Relations (DIR) has issued the 2016 assessments that workers’ compensation insurers are required to collect from policyholders to cover the budget of the state Division of Workers’ Compensation (DWC) and five related programs set up by state lawmakers. The assessments and surcharges cover the Workers’ Compensation Administration Revolving Fund; the Uninsured Employers Benefits Trust (UEBT) Fund; the Subsequent Injuries Benefits Trust (SIBT) Fund; the Occupational Safety and Health Fund; the Labor Enforcement & Compliance Fund; and the Workers’ Compensation Fraud Account. Insurers should apply the following rates against their policyholders’ estimated annual assessable premium for policies incepting January 1, 2016 through December 31, 2016:
| 2016 WC Administration Revolving Fund Assessment/User Funding: | 0.003433 |
| 2016 Uninsured Employers Benefit Trust Fund Assessment: | 0.000532 |
| 2016 Subsequent Injuries Benefits Trust Fund Assessment: | 0.001191 |
| 2016 Occupational Safety & Health Fund: | 0.001925 |
| 2016 Labor Enforcement & Compliance Fund: | 0.001215 |
| 2016 WC Fraud Account Assessment: | 0.001741 |
State law also requires insurers to advance the money on behalf of their policyholders (the first installment is due on or before January 1, 2016; the balance is due on or before April 1, 2016), then recoup the funds via surcharges and assessments on all workers’ compensation policies with 2016 inception dates. Assessment methodologies are noted in the memos DIR issued this week. DIR defines “Assessable Premium” as the premium the insured is charged after all rating adjustments (experience rating, schedule rating, premium discounts, expense constants, etc.) except for adjustments resulting from the application of deductible plans, retrospective rating or the return of policyholder dividends. Insurers must advance the money to the state on behalf of policyholders, then recoup the funds via policy surcharges and assessments. The first installment is due to the state on or before January 1, 2016; the balance is due on or before April 1, 2016, and payments may be made by Electronic Funds Transfer (EFT) or by check.
To cover their share of the 2016 assessments, self-insured and California legally uninsured employers must apply the following rates against the total amount of workers’ compensation indemnity they paid:
| 2016 WC Administration Revolving Fund Assessment: | 0.028913 |
| 2016 Uninsured Employers Benefit Trust Fund Assessment: | 0.005736 |
| 2016 Subsequent Injuries Benefits Trust Fund Assessment: | 0.006585 |
| 2016 Occupational Safety & Health Fund: | 0.010986 |
| 2016 Labor Enforcement & Compliance Fund: | 0.007962 |
| 2016 WC Fraud Account Assessment: | 0.011155 |
More details are included in the DIR memos issued this week. DIR has posted those memos under “What’s New” at www.dir.ca.gov/dwc/ and is mailing them, along with invoices for each company’s share of the assessments and surcharges to California workers’ comp insurers, self-insured employers and legally uninsured employers. Questions about the 2016 surcharges and assessments may be directed to DIR Accounting Administrator II Amadeo Urbano at AUrbano@dir.ca.gov; 415-703-4283 or Naomi Carter at NCarter@dir.ca.gov; 415-557-1020.