The California Department of Industrial Relations (DIR) has issued 2008 assessment rates for User Funding, Anti-Fraud Programs, the Uninsured Employer Benefit Trust Fund and the Subsequent Injury Benefit Trust Fund. State law requires insurers to collect money from employers to cover 100% of the Division of Workers’ Compensation budget, fund the Department of Insurance and local District Attorney’s workers’ comp antifraud efforts, pay benefits to injured workers whose employers were uninsured, and to provide for those who suffer from previous and serious permanent disabilities and impairments.
DIR notes that insurers must apply the following rates against policyholders’ estimated annual “assessable premium” for workers’ comp policies incepting January 1, 2008 through December 31, 2008:
| 2008 WC Administration Revolving Fund Assessment (User Funding LC § 62.5): | .010703 |
| 2008 Uninsured Employers Benefit Trust Fund Assessment (per LC § 62.5): | .001730 |
| 2008 Subsequent Injuries Benefits Trust Fund Assessment (per LC § 62.5): | .000311 |
| 2008 WC Fraud Account Assessment (per LC § 62.6): | .002394 |
Assessable premium is the premium an insured is charged after all rating adjustments (experience rating, schedule rating, premium discounts, expense constants, retrospective rating, etc.) except adjustments resulting from the application of deductible plans 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 1st installment is due to the state on or before January 1, 2008; the balance is due on or before April 1, 2008.
To cover their portion of ‘08 assessments, self-insured employers should apply the following rates against the total amount of WC indemnity paid and reported on their Self-Insurer’s Annual Report.
| 2008 WC Administration Revolving Fund Assessment (User Funding per LC § 62.5): | .030492 |
| 2008 Uninsured Employers Benefit Trust Fund Assessment (per LC § 62.5): | .004358 |
| 2008 Subsequent Injuries Benefits Trust Fund Assessment (per LC § 62.5): | .000814 |
| 2008 WC Fraud Account Assessment (per LC § 62.6): | .006031 |
DIR notes that the 2007-08 Workers’ Compensation Administration assessment is up $62 million from last year due to a smaller fund balance being carried forward from the prior year; a $13 million loan to the Division of Occupational Safety and Health to replace a funding gap in the Targeted Inspection and Consultation Fund; an $18 million increase in the DWC’s general operating expenses, primarily due to negotiated salary increases for represented employees; and $24.8 million in one time costs for the Electronic Adjudication Management System (EAMS), DWC’s computer-based court system, which will simplify and improve its case management process.
DIR is mailing letters and invoices to insurers and self-insured employers showing their share of the assessments. All questions regarding the assessments should go to DIR Manager Amadeo Urbano 510-286-7083 or DWC analyst Naomi Carter at (510) 286-7087. The fund assessment notice is posted on the “what’s new”: page of the DWC Web site at http://www.dir.ca.gov/dwc/whatsnew.htm.