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Workers Comp Claims Drop, Settlement Payments Rise


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By Jorge Casuso

February 28, 2024 -- During the fiscal year that ended June 30, the number of workers compensation claims dropped to the lowest level in more than a decade, according to a report to the City Council this week.

But while indemnity payments and medical costs dropped by $1.6 million in Fiscal Year 2022-23, the savings were largely offset by $1.36 million more spent to settle claims, according the data in the report.

Workers Compensation Claim Frequency
Workers Compensation Claim Frequency (Courtesy City of Santa Monica)

And finance officials warn costs will likely rise as expenses increase due to an aging workforce and a smaller impact made by successful cost control efforts.

The total number of claims filed in Fiscal year 2022-23 fell to the lowest level in at least 10 years -- from 384 claims filed in FY 2018-19 to 245 claims during the past fiscal year.

As of June 30, the total value of all open claims fell to the lowest level in more than seven years and program expenses -- due mostly to lower temporary disability costs for sworn personnel -- decreased.

The drop was largely driven by a 17 percent decrease in filings by police officers, according to the report from Risk Manager Oles Gordeev and Finance Director Oscar Santiago.

The reduction, however, was partly offset by more claims filed by Public Works employees and the most claims filed by firefighters in more than six years.

Claim filings were dominated by those for "cumulative trauma injuries," which accounted for 49 percent of the claims filed.

"These types of injuries are common in an aging workforce and are the result of performing repetitive physically and/or mentally demanding tasks over long periods of time," the report said.

During the 2022-23 Fiscal year, the City spent about $12.2 million on medical treatment and indemnity payments for injured employees, down from $13.8 million in the previous fiscal year.

The largest drop was in indemnity payments, which fell by $1.4 million, while medical costs dropped by $200,000, according to the report.

While the City settled fewer workers compensation claims (80 settlements in last fiscal year, down from 107 the previous year), it paid more money $5,190,406, up from $3,822,837.

"The number and value of settlements tend to fluctuate from year to year due to the severity and timing of injuries, and the willingness of injured employees to settle claims," the report noted.

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