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The state Insurance Department recently announced its approval of “loss cost” filings that may result in workers’ compensation savings to Pennsylvania employers, effective Jan. 1, 2019. The first of these filings from the PA Compensation Rating Bureau reflects the enactment of Act 111 of 2018, in which the legislature responded to the state Supreme Court’s decision in the Protz case with a legislative fix that reinstated the Impairment Rating Evaluation process to the state’s WC system. An important cost-saving measure, IREs were previously used for more than 20 years as a fair and effective way for state-designated physicians to determine a patient’s level of impairment and whether wage benefits should be limited or paid indefinitely. The Court’s decision last year to throw out the IRE process led the PCRB to file a mid-year loss cost increase, which was estimated to increase workers’ comp costs by hundreds of millions of dollars. The PA Chamber led the successful charge in advocating for the legislative fix to this ruling, which resulted in Act 111 and this subsequent loss cost decrease.
The second loss cost change approved by the Insurance Department was reflective of a data error uncovered in Nov. 2017 that was incorporated into rates set in April of this year. In announcing the second change, Insurance Commissioner Jessica Altman said, “it is possible some businesses paid higher rates than they should have … therefore, I am urging all workers comp insurers to determine as quickly as possible whether this is the case for any businesses they insure, and to reimburse any businesses which have overpaid as a result of the November 2017 filing.”
The PA Chamber had sent a letter to Commissioner Altman on Dec. 7 urging the Department to adopt this provision.