Arizona Workers’ Compensation
At A Glance
Worker’s Compensation
Premium Rankings
Arizona’s Ranking
$1.77 $1.49 $1.73 $1.71 $1.61 $1.00 $1.20 $1.40 $1.60 $1.80 $2.00 $2.20 $2.40 $2.60 $2.80 $3.00 $3.20 2000 2004 2006 2010 2012 Ra ng e of P rem iu m R ates 2012 Ranking: 36 (15th lowest in country)
Premium Rate Index per $100 of Payroll: $1.61
Percent of National Median ($1.88): 86%
Source: Oregon Workers’ Compensation Premium Rate Ranking Summary Reports, Oregon Department of Consumer & Business
Workers’ Compensation
Rates
-4.3 0.6 2.4 4.5 8.4 -3.1 4.5 4.1 7.9 -4.2 -2.8 5.2 4 -6 -4 -2 0 2 4 6 8 10 2002 2003 2004 2005 2006 2006 2007 Jan 2008 2008 Oct 2010 2011 2012 2013
463.2 541.9 571.5 672.9 724.1 820.6 946.9 1059.3 1015.5 864.4 773 806 924 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012Taxable Premium
In Millions
2012
Taxable Premium Allocation by Payer
In Millions
All Insurance Carriers $647.6 Self-Insured $276.4
184,600 155,687 136,985 120,535 97,415 94,772 96,003 99,497 24,615 27,865 26,847 23,561 22,772 22,469 23,613 1994 2000 2007 2008 2009 2010 2011 2012 All Self-Insured
660 991 1173 912 739 944 879Arizona Colorado Nevada New
Mexico Utah Regional CW
Claim Frequency of Lost Time
Claims Per 100,000 Workers
523.8 416.2 362.3 404.2 431.7 467.2 481.4 524.6 558.7 562.6 519.4 544.7 568.2 558.7 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012Total Direct Losses
1999 to 2011
Allocation of Losses by Payer
In Millions
296.2 187.8 168.9 146.3 136.0 135.2 126.6 129.7 137.4 165.5 161.9 187.6 212.2 61.2 70.3 77.2 75.3 84.6 100 111.6 100 105.5 111.3 105.9 114 137 166.4 158.1 116.1 182.6 211.1 232 243.2 294.9 315.7 285.7 251.6 243 219 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
2012
Loss Allocation by Payer
In Millions
All Insurance Carriers: $432.5 (77%) Self-Insured: $126.2 (23%)
$416.2 $362.3 $404.2 $431.7 $467.2 $481.4 $524.6 $558.7 $562.6 $519.4 $544.7 $568.2 $558.7 155.7 147.3 137.8 128.8 136.1 138.7 142.4 134 121 97.4 94.8 96 99.5 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012Losses in Millions Frequency in Thousands
24.8 18.7 19.9 18.7 2002 2003 2004 2005 2006 2007 2008 2009 2010 In T ho us an ds $AZ Average Indemnity Cost Per Case
Adjusted to Current Wage Level
Actual
Comparison to CW Average Indemnity
Cost Per Case
Actual 20.7 18.7 20.5 22.3 2007 2008 2009 2010 2011 In T ho us an ds $ Arizona CW
40,879 46,911 42,100 32,779 42,483 42,100 2002 2003 2004 2005 2006 2007 2008 2009 2010 In T ho us an ds $Average Medical Cost Per Case
Adjusted to Current Wage Level
Actual
Comparison to CW Average
Medical Cost Per Case
Actual 39.1 42.1 24 28 2007 2008 2009 2010 2011 In T ho us an ds $ Arizona CW
Distribution of Benefit Costs
Carrier Claims
Ten Years Ago
50% 50% Medical Indemnity Today 71% 29% Medical Indemnity
Distribution of Benefit Costs
Self-Insured Claims
Ten Years Ago
72% 28% Medical Indemnity Today 76% 24% Medical Indemnity
Calendar
Year Admin Fund Rate Admin Fund Revenue in Millions % Change from Prior Year 2012 3.0% $27.7 +14.7% 2011 3.0% $24.2 +18% 2010 2.65% $20.5 -21.% 2009 3.0% $26 -14.8% 2008 3.0% $30.5 -4.1%
Special Fund Revenue
Calendar
Year Special Fund Rate Fund Revenue Total Special in Millions % Change from Prior Year 2012 2.5% $23.1 +14.9% 2011 2.5% $20.1 +4.1% 2010 2.5% $19.3 +48.5% 2009 1.5% $13 -14.5% 2008 1.5% $15.2 -42.6%
Actuarial deficit estimated as of 6-30-12: $46.9 million
Special Fund
Actuarial Picture
Calendar Admin SF General SF Insolvents SF Apportionment Total
1985 3% 1.5% 0 0 4.5% 1986 3% 1.5% 0 0 4.5% 1987 3% 1.5% 0 0 4.5% 1988 3% 1.5% 0 0 4.5% 1989 3.% 1.25% 0 0 4.25% 1990 3% 1% 0 0 4.% 1991 3% 1% 0 0 4.% 1992 3% .75% 0 0 3.75% 1993 3% 0 0 0 3.% 1994 1.25% 0 0 0 1.25% 1995 1.45% 0 0 0 1.45% 1996 1.25% 0 0 0 1.25% 1997 2.15% 0 0 0 2.15% 1998 3% 0 0 0 3.% 1999 3% 0 0 0 3.% 2000 3% 0 0 0 3.% 2001 3% 0 0 0 3.% 2002 2.75% 0 0 0 2.75% 2003 3% 0 0 0 3% 2004 3% 1.5% 0 0 4.5% 2005 3% 1.5% .5% .5% 5.5% 2006 3% 1.5% .5% .5% 5.5% 2007 3% 1.5% .5% .5% 5.5% 2008 3% 1.5% 0 0 4.5% 2009 3% 1.5% 0 0 4.5% 2010 2.65% 1.5% .5% .5% 5.15% 2011 3% 1.5% .5% .5% 5.5% 2012 3% 1.5% .5% .5% 5.5% 2013 2.75% 1.25% .5% .5% 5%
Tax/Assessment History
SB 1310
1. The Commission shall publish a report showing the amount of cash and assets held by the Special Fund that are
attributable or allocated to the payment of claims of insolvent insurers as of June 30, 2013.
2. The report shall include all insurance carriers that have had claims assigned to the Special Fund.
3. The report shall be accompanied by an actuarial opinion confirming the adequacy of the reserves reported and shall also include an opinion from an independent CPA that the methodology used fairly presents the attributable cash and assets.
4. The amount of attributed cash and assets shall include the total amount of monies that are held by the Special Fund from any assessments, recoveries, and released deposits.
5. The Commission must publish the report by the last Commission meeting in 2013.
SB 1148
Workers’ Compensation
Reciprocity
The “old” A.R.S. § 23-904 is repealed and replaced with a “new” A.R.S. § 23-904.
Subsection (A) is the same as it was and preserves the entitlement to AZ benefits for the worker who is hired or regularly employed in AZ but injured in another state
Everything else is new effective September 13, 2013!
A.R.S. § 23-904. Effect of injury without
the state; right to compensation of
Insurance coverage from State A follows ER’s workers performing temporary work in State B. Benefits are provided as if the worker were injured in State A.
A state will honor the extraterritorial
provisions of another state as long as the other
state honors its extraterritorial provisions.
What Claims are Subject to Reciprocity?
•
Any claim made after September 13, 2013,
regardless of the date of injury.
•
Any claim that has not been accepted as
compensable or adjudicated as compensable as
of September 13, 2013.
If Reciprocity Criteria Apply, Then:
•
An employer and worker from another
reciprocity state are exempt from the Arizona
Workers’ Compensation Act while the worker is
temporarily in Arizona doing work for the
employer.
•
An Arizona employer and worker are exempt
from the application of the workers' compensation
insurance laws of another reciprocity state while
the Arizona worker is temporarily working in the
other state doing work for the employer.
•
An Arizona worker who is injured in another
reciprocity state while temporarily working in
that state is entitled to receive Arizona benefits as
their exclusive remedy.
•
A worker from another reciprocity state who is
injured while temporarily working in Arizona
may not file a claim in Arizona. Their exclusive
remedy is under the WC laws of the other
reciprocity state.
• An employer is exempt from requirement to obtain
WC insurance in reciprocity state where worker is temporarily working because employers’ insurance policy in “home” state covers out-of-state
temporary employment (extraterritorial coverage).
• Employer has WC coverage in home state that covers a worker's
temporary employment while in Arizona (e.g. policy with extraterritorial coverage)
• Employer’s home state recognizes extraterritorial provisions of
Arizona and exempts employers and workers from application of the home state’s workers’ compensation laws.
• The workers’ compensation benefits of the home state are the
exclusive remedy against the employer for injuries sustained by a worker who is injured while temporarily working in Arizona
• Employee has worked less than 90 continuous days in Arizona
during the 365 days immediately before the date of injury
Talk to your Legal Counsel!!
• If the Claims Division receives a claim for a worker
injured while temporarily in this state, and no Arizona coverage is found, the Special Fund No Insurance Section will be notified.
• If it appears extraterritorial reciprocity coverage
exists, the Special Fund will deny the claim and check box 11 with this explanation.
• The injured worker can then file in his/her state of
usual employment or can protest the denial.
Evidence Based Medical
Treatment Guidelines
Legislation
A.R.S. § 23-1062.03, requires the Industrial Commission of Arizona to develop and implement a process for the use of evidence-based treatment guidelines, where appropriate, to treat injured workers no later than December 31, 2014.
Advisory Committee Established to
Represent Stakeholders
• Dir. Laura McGrory, Chair
• Donald Dearth, D.C.
• Marjorie Eskay-Auerbach,
M.D., J.D.
• Dennis Kurth, Attorney
• Chris Labban, D.O.
• Bill Lewis, M.D
• Todd Lundmark, Attorney
• Melinda Poppe, ICA Staff
• Sydney Standifird, State of
Arizona Risk Management
• Patricia Treharne, M.D.
• Cathy Vines, SCF Arizona
• Steve Weiss, Attorney
• Joe Tracey, York Risk
Recommendations for the Development and
Implementation of Treatment Guidelines
Advisory Committee has agreed to the following:
• It is appropriate to use treatment guidelines in the
management of chronic pain.
• Existing guidelines will be considered for adoption
(as opposed to drafting Arizona specific guidelines).
• A multidisciplinary panel of respected specialists
will be established to evaluate case scenarios under the following guidelines: ACOEM, Colorado State, ODG, and Washington State.
2014 Statutory
Maximum AMW
Beginning
January 1, 2014,
for injuries that
occur during calendar year 2014, the maximum
Change of Physician Requests
Under A.R.S. § 23-1062.02
Off-Label prescription of controlled substances; Prescription of schedule II controlled substances;
Change of Physician Requests Under
A.R.S. § 23-1062.02
• An employer, carrier, or the Commission may request
a change of physicians if the treating physician does not comply with the provisions of the statute
• File Request to Change Physician with the Claims
Division specifically stating that it is made pursuant to A.R.S. § 23-1062.02(C)(2)
• The Claims Division will refer the request to the
Administrative Law Judge Division for investigation and resolution. If necessary, the matter will be set for hearing on an expedited basis