Ep. 608 Rising Impact of Cumulative Trauma Claims in California Workers’ Compensation System

Rancho Mesa’s Alyssa Burley sits down with Rancho Mesa President David Garcia to give an update on Cumulative Trauma Claims in California and what we’re doing to push for reform.

Show Notes: ⁠⁠⁠⁠Subscribe to Rancho Mesa's Newsletter⁠⁠⁠⁠

Host: ⁠⁠⁠⁠Alyssa Burley

Guest: ⁠⁠⁠⁠David Garcia

Editor: Jadyn Brandt

Music: "Home" by JHS Pedals, “Breaking News Intro” by nem0production

© Copyright 2026. Rancho Mesa Insurance Services, Inc. All rights reserved.

Transcript

Alyssa Burley: You’re listening to Rancho Mesa’s StudioOne™ podcast, where each week we break down complex insurance and safety topics to help your business thrive.

I’m your host, Alyssa Burley, and I’m joined by Dave Garcia, President and CEO of Rancho Mesa. And, today we’re going to give an update on Cumulative Trauma Claims in California and what we’re doing to push for reform.

Dave, welcome to the show.

Dave Garcia: Thanks, Alyssa. I'm glad to be here.

AB: Now Rancho Mesa has been addressing the rise in CT Claims for several months, now. We’ve hosted a CT Claims workshop with Berkshire Hathaway Homestate Companies, written articles, mentioned it on this podcast, and sent letters to legislators asking for reform. But, for listeners who might not be familiar with the current CT Claims situation in California, will you give us a brief overview of what we’re seeing in the state?  

DG: Sure, I'd be happy to. I actually just got back from a conference where I was with a lot of the insurance leaders, so a lot of the numbers are fresh off the press. So what I can tell you is the tracking of CT claims just continues to rise. So currently, we're at 26.4% of all lost time claims, indemnity claims, are attributed to CT. And what's interesting about that is in 2021, that same number was 15.3%. So it's almost doubled in that time. And there's some real factors that went into that. If you'll recall, that's right about when COVID hit. And so in some fashion, how these claims were being handled pre-COVID has changed to how they're handling post-COVID, which is why we definitely need the reform.

And, not shockingly, and I'm sure every business that's listening to this will understand. Of those CT claims today, 60% are post-termination claims, another area that needs to be addressed. So it is continuing to be, and we're seeing projected rate increases by the Bureau at 10.4%. I would think it's going to probably fall more, once the commissioner rules on it, I think we'll see some number in the 6 to 8% range. But that'll mark two consecutive years in a row where we've seen pretty significant rate increases. And by and large, it's attributed to the rise in CT claims.

AB: All right. So the CT claims, these are claims typically that happen over time with employees maybe doing the same repeated motions over and over again. And maybe they're not telling their employer about them until maybe they're let go or they could potentially be fraudulent, correct?

DG: Correct. Yeah, I think it's, you know, there are legitimate. cumulative trauma claims. And nobody is advocating to have complete removal of those types of claims. But it appears that there's been a lot of abuse of the system and there's a lot of multi-body part CT claims where maybe an attorney has gotten involved and is starting to attach different body parts and each filing separate claims, which is just adding to the staggering cost of this thing. So I think that the message is you know, we can work with 15.3% of claims being CT because those are probably legitimate cumulative trauma claims. We cannot operate at 26% or 30%. That's just way out of hand.

AB: Yeah. So now, you were just at a multi-day insurance industry event, what was the consensus when you spoke with carriers and other brokers about CT Claims in California? Are other brokers doing anything to push for reform?

DG: Yeah, you know, no, short answer. The other agency principals that I spoke with are just kind of throwing up their hands and really haven't taken any proactive steps. They're just kind of in a wait and see mode. I think the carriers, on the other hand, recognize the impact of these claims. And, you know, in trying to do the best job I can do as the CEO of Rancho Mesa, I want to know which carriers are really actively trying to control this cost, because that's something that we're going to want to share with our clients and people that want to work with us. Put them in the best position to try to remedy some of this situation. It's going to take reform to actually make the fixes. I don't see that occurring in this election cycle in ‘26, but we're really pushing hard for ‘27.

Interestingly enough, Vern Steiner is a friend of mine. He's the president and CEO of the State Fund. Right now, the second largest work comp carrier in California. And so he and I had a lengthy conversation about this. And he's agreed to come on as a guest to a future podcast. So if listeners are interested in hearing from a really brilliant man his position on this, stay tuned. It'll probably be in the next 30 days or so that we're able to connect our schedules. But I think he's very insightful and he's got some ideas and hopefully some action plans that will help to push reform every which direction that we can go.

AB: Okay. So Dave, if listeners want to make their voice heard about CT claim reform in California, what do you recommend they do?

DG: So we, you know, I guess I've been in the industry 40 years now. And for whatever reason, this has become my go-to issue. So a few months back, I wrote a couple of letters to the two committee chairs that would rule on this. One's a senator. Her name is Smallwood. And then there's an assemblywoman. Her name is Calderon. And so what we have available to our listeners is if you'd like to get a copy of those, you can just come to our Rancho Mesa website.

So it's www.ranchomesa.com. Click down on the Insights, look at Industry News, and then look for the CT Claims Legislation Letters. And you'll see word copies, word documents there that you can read over, change. names and addresses of where they need to go. Each of these women, each has two offices, one in Sacramento and then their local office. So I would encourage all listeners, if you want to feel like you're trying to do something, take a look at those letters. And like I say, modify them to your own desire, but push them off.

You know, we've met with several construction associations. They understand the issues. We're encouraging the members of the associations to get behind this thing, whether it's the letters that we created or other letters, they're lobbyists. I think we need to put some pressure on Sacramento. So if you're part of any association or group, please push your administrators in those things to do something about this. Without it, it's not going to go away.

And, you know, we get asked frequently, well, in the interim, you know, what, if anything, can we do if you're the employer? And so there's no real tried and true, just do this and it'll all go away. But I would say what we do when we put our workshops on and try to advise our clients on best practices, I would say take a strong look at your hiring processes. You know, if it's part of this and I know, you know, things can be busy and you just need people sometimes or it gets a little lax. But, you know, trying to stop it at the door before it comes in is probably a good thing. So if you feel good about your hiring practice, it's great. Just keep doing what you're doing. If you think it's something you need to look at, find a way to improve it.

The other side of it is at dismissal. So sometimes you're having maybe a job's completed. You don't need as many workers. Really take a look at your dismissal process. We've seen that as being really beneficial in terms of letting that employee know why they're being dismissed, that they're a valued person, that as soon as more work permits, they want to try to bring them back, things like that. Because again, as I mentioned earlier, 60% of all these claims are post-termination. People get laid off. Maybe they're frustrated. Maybe they're angry. Maybe they feel they were let go inappropriately. We see a lot of retaliatory post-term claims with CT. And the attorneys are more than happy to represent these people. So think about that. And I know most everybody tries to treat their employees like family, and that's really important. You want to make sure that your foremen, your superintendents, your supervisors, people in the leadership position. are treating their employees with respect and kindness when available. Because again, there are people that will look to file a claim just to get back at you.

Aside from that, I really think I would challenge your broker to do their due diligence and look at carriers that can represent your workers' compensation that are aligned with this battle against CT. How are they handling CT claims internally? And that's probably a whole other podcast I'd love to talk about because we have created a benchmark best practices that we think a carrier needs to have in place to try to control this thing. So it's out there, but you need to ask the questions. And then work with your broker and see what agency services they have. Hopefully they've got work comp claim advocacy. And are they conducting workshops to help educate you? And are they pushing for this kind of reform? It's really, really needed. And it's not going to happen if we don't rally the troops and get behind this. So that's kind of what I see coming from all of this.

And I would say that 100% of the carriers I spoke to and shared with what we're trying to do, they were very supportive and impressed that we're trying to lead this charge. So join me in this. You know, you're not a client of Rancho Mesa, that's fine. But we need to fix this for the state of California.

AB: Yeah, all really good points, Dave. Thank you so much for joining me in StudioOne. It's always a pleasure to have you in.

DG: Great. Thanks, Alyssa. I look forward to the next time.

AB: Thanks for tuning in to our latest episode produced by StudioOne™. If you enjoyed what you heard, please share this episode and subscribe. For more insights like this, visit us at RanchoMesa.com and subscribe to our weekly newsletter.