New York Governor Kathy Hochul announced a steep decrease in the premium rates employers will pay for workers’ comp coverage, along with hundreds of millions in dividends and discounts from the New York State Insurance Fund (NYSIF), the state’s largest comp insurer.

On July 15, 2026, the state’s Department of Financial Services (DSF) approved the New York Compensation Insurance Rating Board (NYCIRB)’s proposed 21.9% drop in the overall loss cost level, which directly informs premium rates, effective October 1, 2026.

The Governor’s office trumpeted an estimated $1 billion in savings for New York employers from the premium drop, in addition to over $700 million that NYSIF policyholders already received over the past year.

The good news for New York employers follows a national trend of plummeting premiums, as costs continue to slide and insurers enjoy a run of steady profitability from the workers’ comp line.

One exception to this national trend: California, where employers’ premiums will jump for the second consecutive year. California’s wildly inefficient workers’ comp system continues to produce more administrative friction than positive health outcomes for injured workers, with claims costing twice as much and taking twice as long to resolve compared to the national medians.

New York’s drive to improve and modernize its comp system under Governor Hochul shows what’s possible when competent leadership does the work necessary to execute meaningful reform. California’s rudderless approach, from a seemingly disinterested Governor Gavin Newsom to a state comp agency that has all but abdicated its enforcement role, is a masterclass in failure.

NY: Stacking the Workers’ Comp Wins

The New York Governor’s office credits workplace safety reforms, including the Warehouse Worker Protection Act, with helping to decrease the frequency of lost-time claims, which in turn reduces costs enough to lower workers’ comp premiums.

Premiums have been sliding downwards by over 10% annually on average since 2020.

Meanwhile, NYSIF, New York’s functionally non-profit insurer of last resort and the single largest carrier in the state, has been able to cover millions of workers statewide and still have enough revenue left to shower policyholders in dividends and premium discounts, to the tune of over $2.8 billion during Hochul’s tenure.

All of this success comes as Hochul and the NY Workers’ Compensation Board (WCB) have aggressively pushed to streamline and update the administrative side of the comp system and to encourage provider participation. In the last few years, New York has:

• Discarded the provider authorization process to allow any eligible physician to treat injured workers, starting in 2028
• Moved all Prior Authorization Requests to a state online digital format
• Mandated electronic billing statewide (and allowed providers to bill payers to offset the cost thereof)
• Allowed resident and fellow physicians to treat injured workers

The WCB has also proposed increasing the workers’ comp fee schedule to make reimbursement rates “competitive with private insurance.”

…and Then There’s California

On the opposite coast, California employers will pay 6.6% more for comp coverage beginning in September 2026, on top of last year’s 8.7% increase.

Most galling of all, these employers are forking over more of their revenue for a system that fails on almost every level.

Injured workers struggle to obtain care under the chaotic, seemingly unregulated Medical Provider Network (MPN) system. With MPN access standards unenforced, the state’s tangle of 2,500+ networks can be impossible to navigate, with doctors and injured workers having no reliable way to confirm which providers are eligible to treat which patients.

California’s Utilization Review (UR) system is effectively unmonitored, despite multiple laws requiring the California Division of Workers’ Compensation (CA DWC) to gather, analyze, and publicize UR data. Treatment approval rates vary wildly from payer to payer, indicating that medical necessity isn’t always the primary factor driving UR decisions.

Treatment authorization, theoretically an inviolable guarantee of appropriate payment, does nothing to protect providers who routinely face reimbursement denials (often predicated on demonstrably bogus claims of MPN non-membership) for authorized care.

Providers wade through a deluge of mandatory, often redundant and antiquated paperwork requirements throughout the life of a claim, spending countless hours on useless administrative labor that goes largely uncompensated while the data go uncounted.

On top of it all, payers consistently violate state laws and regulations. No matter how many hundreds of thousands of violations we document and report to state authorities, the California Division of Workers’ Compensation (CA DWC) takes no effective action to deter the abuse.

California doctors have every rational reason to avoid treating injured workers. Injured workers face a landscape where care can be hard to find, and even harder to obtain promptly. As injuries worsen and claim durations lengthen, employers pay more and more: in disability costs, lost productivity, and premiums.

Meanwhile, Governor Newsom sits atop a state government that has the power and means to make workers’ comp work more like it does in New York. Instead, Newsom and the agencies under his authority do…nothing (or at least nothing particularly useful, in our view).

Perhaps the Governor’s presidential ambitions don’t leave time for pesky tasks like ensuring that employers’ premium dollars are well-spent.

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