For Immediate Release
August 16, 2017
HARRISBURG - The Pennsylvania Compensation Rating Bureau yesterday took an unprecedented action in filing for a mid-year loss cost increase that could lead to significant additional burdens on Pennsylvania employers. In the filing, the PCRB proposed an overall average change in loss costs of +6.06 percent. This action resulted from a recent Pennsylvania Supreme Court decision in the Protz v. Workers’ Compensation Appeals Board case, which throws out Impairment Rating Evaluations. IREs have been in existence since 1996 and are used by physicians - in tandem with guidelines from the American Medical Association - to assess an employee’s level of impairment and determine their disability status.
“For more than two decades, IREs have played an integral role in bringing structure, fairness and stability to the workers’ compensation system,” PA Chamber President Gene Barr said. “Yesterday's announcement by the PCRB marks the first time the rating bureau has ever filed for an interim loss cost increase halfway through the year. Pennsylvania’s employers should be aware that they could see significant cost hikes in the near future.”
Interestingly, in its ruling on the Protz case, the Supreme Court did not object to evaluating workers’ compensation claimants to determine level of impairment; nor did it object to limiting the duration of benefits for injured workers or using AMA guidelines. The court only ruled that the IRE process was unconstitutional because AMA guidelines are updated periodically (twice since the law was passed in 1996) without legislative review and therefore, since the current version differs from the version used in 1996, their use is an unconstitutional delegation of authority.
“Absent legislative action, costs to employers will ultimately exceed this initial filing,” Barr added. “The rate filing does not take into account claims that are currently active or will reopen in the future, nor does it reflect the impact this ruling will have on employers who self-insure. The bureau’s action has left no doubts that workers’ compensation costs on employers will continue to increase in the years to come. The Pennsylvania Chamber is urging lawmakers to consider legislative remedies for this detrimental court decision.”
The Pennsylvania Insurance Department must approve the PCRB’s filing. The bureau has requested that the increase go into effect on November 1.
The Pennsylvania Chamber of Business and Industry is the state's largest broad-based business association, with its statewide membership comprising businesses of all sizes and across all industry sectors. The PA Chamber is The Statewide Voice of BusinessTM.