Friday, August 06, 2010

30% Workers Compensation Rate increase/ 1099s

Yesterday the Workers Compensation Insurance Rating Bureau chief actuary estimated a 30% workers compensation rate increase for January 1 2011. This will have to go to the Board of WCIRB.

The WCIRB recommendation is purely advisory and can be rejected or modified by the Insurance Commissioner Poizner. Last fall the bureau called for a 22.8 percent increase which Poizner rejected citing the poor economy and need for insurers to cut costs. WCIRB makes annual or semi-annual rate recommendations. This latest recommendation is consistent with their last proposed rate increase of 23.7 percent. The WCIRB cited escalating claims costs and recent court decisions as the basis for the need to increase rates.

The Senate Jobs bill will be coming back to the Senate in September. As you know by prior emails they are looking at adding an amendment to change the requirement of 1099s for all goods and service providers who receive over $600 from your business.

An amendment has been put forth by Senator Baucus to eliminate filing for businesses with less than 25 employees and for those over 25 increase the threshold from $600 to $5000. To make up the revenues they would charge a tax on the 5 largest oil companies.

It has not been reported how much this will raise but the health bill with 1099 requirement would raise $17 billion over 10 years.

The question is if this tax raises $17 billion or more why not repeal the requirement completely. Small Business California is looking into this.


Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@cal-insure.com
415-680-2188

1 comment:

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