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Posted on: Jun 1, 2020

The Workers’ Compensation Insurance Rating Bureau (WCIRB) recently released a report estimating the cost of the rebuttable presumption for COVID-19 enacted by Governor Newsom and it seems they’ve come back down to reality.

In their initial estimate, commissioned by Assembly Insurance Committee Chair Tom Daly and published in April, the WCIRB said costs could reach $33.6 billion for a presumption for all essential workers who contract COVID-19 on the job.

Various news outlets picked up on the excessive numbers, leading many observers to question the viability of protecting workers through such means.

In a subsequent report published in May, the WCIRB offered a preliminary estimate for Governor Newsom’s rebuttable presumption putting costs between $600 million and $1.8 billion, a far cry from the outrageous numbers previously reported (they have since updated the high end of the estimate to $2 billion in a report released last week).

While the April WCIRB analysis was based on a “conclusive” presumption and the Governor’s Executive Order is for a “rebuttable” presumption, WCIRB actuarial committee members stated at their May 19 public meeting that rebuttable presumptions usually result in benefits for the injured worker.

Clearly, the difference between “conclusive” and “rebuttable” does not account for the $31 billion discrepancy in their cost estimates. If anything, the rebuttable presumption would likely increase frictional costs due to employers denying claims.

Given the large discrepancy in the estimates, CAAA President Joe Capurro sent a letter to Governor Newsom and several other members of the legislature questioning the integrity of the WCIRB’s work moving forward, especially considering the initial report was requested by a member of the legislature.

The letter was also sent to the various news outlets and reporters who covered the initial numbers in hopes they would cover the new estimates as a reality check.

Whether the WCIRB’s initial report was an attempt to dissuade Governor Newsom or legislators from pursuing a presumption is for others to decide.

To view the letter in full, along with charts showing the estimated costs, click here.