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State Fund is California's largest provider of workers' compensation insurance and a vital asset to California businesses. State Fund supports California's entrepreneurial spirit and plays a stabilizing role in the economy by providing fairly priced workers' compensation insurance making California workplaces safe, and restoring injured workers.




Frequently Asked Questions

What is the State Compensation Insurance Fund (State Fund)?

Established by the California Legislature in 1914, State Compensation Insurance Fund is a self-supporting, non-profit enterprise that provides workers' compensation insurance to California employers. State Fund is headquartered in San Francisco.

How can I obtain a policy with State Fund?

Workers' compensation insurance may be purchased directly from State Fund by starting the application process online though our "Request a Quote" tool, by calling any of our State Fund office locations, or through a broker that has an established business relationship with State Fund.

The first step is to complete our questionnaire/application, which you can start online though our "Request a Quote" tool. You can also call a State Fund office location.

We need to know how many employees you have, their estimated annual payroll, and what kind of work they do. Certain businesses that require licensing are required to provide proof that such licenses are valid and current. If your business has had prior workers' compensation insurance, you will be asked to provide additional information such as loss runs and your policy history for up to five preceding policy years.

Can State Fund give a quote over the phone?

No. Determining the correct job classifications and rates for premium calculation is not as simple as it sounds. Jobs which appear similar may be considered different for classification purposes. State Fund reviews your operations carefully to make sure you are charged the correct rates. For this reason, we cannot give estimates over the phone.

What is workers' compensation?

Workers' compensation provides benefits to employees who are injured or become ill during the course of or due to employment. In California, every employer is required to carry insurance to cover the cost of occupational injuries and illnesses. This insurance requirement is mandatory even if you have only one part-time employee. Companies based out-of-state with employees hired in California must also have California workers' compensation insurance.

Is workers' compensation the same as State Disability?

No. Workers' compensation is only for injury or illnesses that occur due to employment. State disability is for injuries or illnesses that are not work-related. These are handled by the Employment Development Department (EDD). State Disability Insurance (SDI) is automatically deducted from the employee's paycheck.

How is workers' compensation premium calculated?

Before 1995, the rates applied to your premium were established by the Workers' Compensation Insurance Rating Bureau. As of January 1, 1995, all insurance carriers are responsible for establishing their own rates. This system of determining rates is called the competitive rating system. Under competitive rating, State Fund's pricing is based on the classifications, the size of payroll and the individual risk characteristics of each business. These base rates for each class code will be multiplied by the employer's payroll. Form 10502 "Understanding Your Quote For Insurance" is available upon request at any State Fund Office. The form will explain in more detail how insurance premium is calculated.

Does my company's accident record affect my premium?

Yes. Your ability to control workplace accidents can affect your insurance premium. When you apply for insurance with State Fund, we will perform a risk evaluation of your operations. The risk evaluation will ensure that each business with its diverse operations receives a fair price representation. The results of the evaluation will be included into your premium calculation. If your safety record is better than the average for your industry, your premium could be decreased by a percentage. A worse than average loss history could result in increased premium. This is called experience modification, Employers with poor loss record or unsafe working conditions may also pay more than basic rates by having a surcharged applied to their premium. Consult with your broker or State Fund representative to find out if you are eligible for experience modification.

What does State Fund offer the broker community?

At State Fund, it's all about service. Brokers will find their contact with us is made easier because:

  • assigned marketing representatives will assist you with everything from getting a quote to arranging support for your larger accounts.
  • we are a "direct bill" carrier and handle all billing and premium collection so you can focus on other areas of your business.
  • our expert, professional safety and industrial hygiene staff, the largest and best trained in California, works locally with accounts, providing safety surveys, loss analysis reports, Cal-OSHA counseling, and safety materials, all at no extra cost.
Does State Fund pay commission?

Yes. State Fund offers a commission schedule with commissions paid monthly on qualifying new and renewal broker business regardless of premium size. For more information about our commission plan, please contact the State Fund office nearest you.

How do I become a broker with a business relationship with State Fund?

At this time, State Fund is not appointing any new brokers. However, State Fund has contracted with two authorized State Fund Access Partners. If you are a broker that would like a business relationship with State Fund, you should contact one of the State Fund Access Partners directly to begin the contract process with them.

The following are the authorized Access Partners that State Fund is contracted with:

RIC Insurance General Agency, Inc.                     
1330 North Dutton Ave, Suite 200
Santa Rosa, CA 95401
Toll Free # 855-851-7827
accessstatefund@ric-ins.com
www.ric-ins.com

StateFund First, A subsidiary of Arthur J Gallagher & Co
1255 Battery Street., Suite 450
San Francisco, CA 94111
Toll Free # 855-784-4433 ext 8438
service@statefundfirst.com
www.statefundfirst.com

How are rates determined?

Under competitive rating, the Workers' Compensation Insurance Rating Bureau determines advisory, or pure premium rates. These rates are determined by the combined claims costs of each classification reported by all California carriers. These advisory rates include losses and the cost of administering the claims, but do not include carriers' other expenses, such as taxes and general expenses, nor a provision for profit. Since these pure premium rates are advisory in nature, they only serve as a guideline for carriers in pricing insurance. As in any market driven pricing, carriers determine their rates by assessing their expected losses and expense costs and analyzing prevailing prices charged by other carriers. These costs include claims administration, increased benefit changes, and (if they are a stock company) stockholders' profits. As with other forms of insurance, you can expect prices and discounts to vary from carrier to carrier.

A carrier may start with a basic rate for a classification and then give credit discounts for premium size, a good safety record, or group plan membership. Carriers may have a rating system which further credits or debits a rate based on the individual risk's qualities. On the credit side, a company's early return-to-work program or comprehensive health program for employees generally reflects a lower risk for the carrier, and may warrant a premium discount. Conversely, a rate could be debited for high losses, frequency of accidents, or poor safety controls. This is similar to how other types of insurance are priced (e.g. good driver plan in auto insurance).

What is a minimum premium?

Basically, minimum premium is the least amount for which the insurer is willing to insure an employer. Each insurer files their minimum premiums with their rating plan to the California Department of Insurance. For example: An insurance company has set a minimum premium of $500 for your type of business. Assuming your actual payroll is only $20,000 with a manual rate of .78 per $100 of payroll, your calculated premium would be $156 ($200 X .78). But you would still pay $500 minimum premium instead of $156, since your insurance company has set its minimum premium at that level. Thus you are encouraged to shop around for the company with the lowest minimum premium if you have a small payroll.

What is Return to Work?

Is critical in decreasing lost workdays, and avoiding unnecessary disability syndromes. It is the process of bringing an injured employee who has not fully recovered back to work as early as possible. The focus is on functional recovery, not on just the relief of symptoms.

What is transitional work?

A temporary, short term change in job duties that allows an injured employee to return to work at a job that is less physically or mentally demanding than his or her regular assignment. This includes both transitional modified work and transitional alternative work.

What is modified work?

A change in the work environment, including job restructuring, equipment/tool modification or selection, and/or workstation modifications.

What is alternative work?

A change in shift or reassignment to another job.

How does Claims Management Services (CMS) handle new claims?

Our Call Reporting Center can process a new injury claim anytime, day or night! In addition, we provide on-line computer systems, fax lines, and telephone reporting procedures which are designed to speed notification.

Once we learn of an injury we will contact you, your injured employee, and your employee's physician within 24 hours. We process new claims and make them available for your on-line review within 48 hours.

Studies have proven that prompt attention to injury claims can significantly reduce medical and legal costs. At CMS, we believe effective case management begins with timely reporting!

Who do we contact when we have questions about our claims?

Your Claims Specialists will handle all injury claims from inception and they will function as your key contact people with CMS. They will be able to recognize claim trends, develop a strong understanding of your organization, and learn how best to serve you. Our Compensation Professionals will ensure that minor cases never become major concerns. We make sure that your Claims Specialists are always available to speak with you because we believe strongly in your right to receive clear and helpful communication from us.

How will CMS control our medical costs?

The extensive cost containment and medical management programs at CMS comprise a highly successful approach for reducing medical expenses. We obtain appropriate, quality medical care for your injured worker and we make frequent contact with care providers to ensure that neither the disability leave nor the medical services extended to your employee are excessive.

Our Physician Consultants are prepared to evaluate the necessity and benefit of the health services provided to your employees. The CMS in-house bill review service reduces medical and pharmacy charges, ensuring that payments are made in compliance with the Official Medical Fee Schedule of California. This service produces substantial cost savings for our clients by greatly reducing the need for outside bill review.

When are litigated claims referred to attorneys?

Defense counsel is hired only if a claim involves complex legal issues or the claim cannot be settled outside of court. Your Claims Specialists will make every effort to negotiate and settle litigated claims prior to trial, and the CMS Litigation Representative will defend your interests at pre-trial conferences and lien trials. We always obtain client authorization before referring an injury claim to a defense attorney.

Note: State Compensation Insurance Fund is not a branch of the State of California.

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