November 10, 2025 | Oakland, CA — MedLegalNews.com — A new report from the California Workers’ Compensation Institute (CWCI) reveals that complex injury claims—particularly those involving long COVID, mental health components, and multiple comorbidities—are driving up workers’ compensation costs across California.
The analysis, based on claim data from 2022 to mid-2025, highlights a significant post-pandemic shift in the nature of claims, with an increasing number of cases classified as “multi-dimensional,” meaning they involve both physical and psychological impairments.
“The pandemic’s ripple effects on worker health are still being felt,” said CWCI Research Director Stacy Jones. “We’re seeing a notable rise in complex cases that require longer treatment durations, extended disability periods, and additional med-legal evaluations.”
Post-Pandemic Claims Driving Cost Surge
According to the CWCI report, the average paid loss per complex claim rose by 18% between 2021 and 2024, outpacing both inflation and overall system cost growth. Long COVID cases, in particular, have proven costly due to extended recovery times, neurological symptoms, and psychological sequelae such as anxiety and depression.
Other contributors to rising complexity include:
- Overlapping psychiatric and orthopedic diagnoses
- Delayed return-to-work timelines
- Increased use of telehealth evaluations
- Greater dependence on secondary medical opinions and QME reports
Mental Health and Long COVID Claims Under the Spotlight
The report identifies psychiatric add-on claims—cases where a psychological injury is added to a physical injury claim—as a major driver of cost escalation. CWCI data suggests these hybrid claims take 30% longer to resolve and result in higher indemnity payments.
Additionally, long COVID-related claims continue to pose unique administrative and medical challenges. Many of these cases remain open due to persistent symptoms and uncertainty around long-term impairment ratings.
“COVID-era claims have redefined what constitutes a ‘complex case,’” the report notes. “The combination of chronic illness and mental health implications is testing the limits of traditional claim management models.”
Industry Response and Legislative Attention
Stakeholders, including the California Department of Industrial Relations (DIR) and employer coalitions, have expressed concern about the sustainability of these cost trends. Some legislators are calling for updated guidelines for psychiatric add-ons and standardized criteria for long COVID impairment ratings.
Analysts believe the report may influence upcoming reforms to the Permanent Disability Rating Schedule (PDRS) and future DWC rulemaking on complex case management.
Visit the full CWCI report here.
Key Highlights
- Source: California Workers’ Compensation Institute (CWCI)
- Primary Findings: Complex claims with long COVID and psychiatric factors driving cost increases
- Average Paid Loss Growth: 18% from 2021–2024
- Focus Area: Post-pandemic claim complexity and system strain
The CWCI’s findings highlight a critical shift in California’s workers’ compensation environment, as claim severity rises due to lingering post-pandemic health conditions and psychological components. Industry leaders say the data reinforces the urgency for enhanced case coordination, modernized medical-legal evaluation standards, and policy updates that can better manage the growing complexity and cost of long-duration claims.
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FAQs: About the CWCI 2025 Workers’ Compensation Report
What is the CWCI Workers’ Compensation Report 2025?
It’s a data-driven study examining post-pandemic claim trends in California’s workers’ compensation system, focusing on complex and high-cost cases.
Why are complex claims increasing?
Factors include lingering COVID-related symptoms, rising psychiatric comorbidities, and longer disability durations.
How does this affect employers and insurers?
Rising complexity drives up claim costs, premiums, and administrative burdens, impacting the financial stability of the system.
Where can readers find the full CWCI study?
The official report and data summaries are available at the CWCI website.