Once again, California may significantly increase the cost of workers’ compensation coverage for employers.

Workers’ Comp Executive reports that the Workers’ Compensation Insurance Rating Bureau (WCIRB) is asking Insurance Commissioner Ricardo Lara to increase the state’s advisory pure premium rate by 10.4%, effective September 1, 2026.

This follows last year’s 8.7% increase, as California remains one of the few states in the nation to raise premiums while most other states are lowering rates.

California employers continue to dump money into one of the most inefficient, ineffective comp systems in the nation. Measures theoretically designed to “control costs,” such as Utilization Review and Medical Provider Networks, impede care and deter provider participation while enriching insurers, Third-Party Administrators, vendors, and the private equity interests invested in the dysfunction.  

Employers should be outraged as they pay more every year for a system that delays and denies care for their injured employees while insurers, TPAs, vendors, and private equity profit. No other state sanctions this kind of employer abuse. Governor Newsom, who appoints the officials running this system, has done nothing to stop it.

WCIRB Strikes Again

The WCIRB is an independent rating bureau funded exclusively by insurance carriers. While the organization has members nominally representing employer and labor interests, insurers overwhelmingly dominate its Governing and Actuarial committees.

In fact, according to Workers’ Comp Executive, a separate actuary working on behalf of the employer and labor contingents of the WCIRB recommended a drastically smaller increase of 5.1%; the dominant insurer faction overruled that contingent.

daisyNews and Workers’ Comp Executive have repeatedly highlighted the problems with relying on WCIRB research to determine premium rates, including:

• The WCIRB categorizes non-medical expenses (from which TPA and insurers profit) as “medical” costs.
• The WCIRB neglects to factor Preferred Provider Organization (PPO) discounts into its medical cost calculations.
• The WCIRB makes insurers appear less profitable by excluding key sources of income and failing to distinguish between for-profit private insurers and California’s State Compensation Insurance Fund (CA State Fund).

CA Rate Hikes Defy Reality

As employers’ premium rates plummet around the country (see Pennsylvania for the latest example), California continues to punish its employers in defiance of data that undermine the WCIRB’s conclusions.

Workers’ comp is stupendously profitable nationally, with insurers making more money from comp than any other line of insurance. Loss ratios for California insurers specifically indicate profit (that includes the CA State Fund, which is literally non-profit). California providers’ fee schedule rates for treating injured workers are among the lowest in the USA, even before PPOs take their cut.

The WCIRB’s reading of its opaque, insurer-derived data, for which there is no independent verification, continues to profit insurers as employers dig deeper into their pockets.

Worst of all, employers are getting an abysmal return on investment for their increasing premiums as payers stall treatment through Utilization Review and drive providers out of the system through payment abuse, and disability payments mount. Overall, California claims take twice as long and cost twice as much to resolve as the national medians.

California employers, strap in. The WCIRB clearly has no plan to allow the national trend of decreasing premium rates to reach the Golden State.

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