States across the nation continue to lower the cost of workers’ comp coverage while California employers pay higher and higher premiums. The latest addition to the list: Pennsylvania.

Effective April 1, 2026, the Pennsylvania Insurance Department (PID) approved a 1.22% decrease in the “loss costs” that inform employers’ premium rates. As a result, Pennsylvania employers will likely pay less to cover the costs of injured employees.

The latest cut caps an over 20-year trend of generally decreasing Pennsylvania loss costs, which have declined by more than 67% cumulatively since 2005.

Meanwhile, in California, the Workers’ Compensation Insurance Rating Bureau (WCIRB) has requested state Insurance Commissioner Ricardo Lara hike employers’ rates by over 10% this year, on top of last year’s 8.7% increase, all to fund a system that costs twice as much and takes twice as long as the national median to resolve claims.

Why is California a stubborn exception to a trend that’s helping employers across the country? And why aren’t California employers getting better results for their ever-increasing premiums?

PA Keeps the Cuts Coming

Like California, Pennsylvania relies on an independent rating bureau to crunch the numbers and establish reasonable premium rates. The Pennsylvania Compensation Rating Bureau (PCRB) filed the latest loss costs decrease to the PID.

Unlike California, Pennsylvania translates insurer profitability into relief for employers. As Pennsylvania Insurance Commissioner Michael Humphreys stated (emphases ours):

“A strong and competitive workers’ compensation market benefits both employees and employers. This ensures businesses can access affordable coverage while maintaining the protections workers rely on if they are injured on the job.”

As the chart from the PCRB’s 2024 State of the Line report shows below, loss costs have been coming down for decades in Pennsylvania, allowing the state to keep premiums relatively steady despite steadily rising payroll, which would normally drive premiums upward. As the report notes (emphases ours):

“While payroll has been consistently increasing and doubled over the period shown, loss cost reductions and rising wages have generally balanced each other out, minimizing any significant swings in earned premiums.”

CA: A Dubious Exception to a Positive Trend

So, why does California insist that employers have to shovel more of their money into insurers’ coffers? Reasonable parties can debate the answer, but should do so in the context of some hard facts:

• Data from the National Council on Compensation Insurance show that nationally, insurers are raking in the profits on workers’ comp, which is the most lucrative line of insurance in the game.
• Data from the National Association of Insurance Commissioners show that, specifically in California, insurers’ loss ratios are healthy, indicating profitability.
• California's fee schedules for workers' comp providers are among the lowest (and that’s before factoring in rampant Preferred Provider Organization discounting)
• Industry analysts have credibly accused the WCIRB of “skewing” the data that inform California premium rates, by inflating insurers’ costs.

From coast to coast, almost every state in the Union has concluded that market conditions warrant a break for employers. Yet California hiked premiums by 8.7% last year, and may hike them 10.4% higher in September 2026, based on the WCIRB’s questionable calculations and a formal request from an Insurance Commissioner facing accusations of his own questionable accounting practices.

California employers deserve more transparency and, more than likely, lower premiums.

daisyBill tracks every bill and RFA, so your team always knows where you stand. Click below to learn more:

BILL BETTER: DAISYBILL