California WC Medical Mileage Rate To Increase to 65.5 Cents/Mile For Travel o/a 1/1/23
Today the IRS issued a news release to announce that the standard mileage rate for business miles will increase from 62.5 cents per mile to 65.5 cents per mile effective January 1, 2023. As a result, the amount payable to California injured workers for travel related to medical treatment or evaluation of injuries also will increase to the new rate. Workers’ compensation claims administrators should apply the new rate for travel on or after January 1, 2023, regardless of the date of injury, but should continue to pay the current rate of 62.5 cents per mile for travel that occurred between July 1, 2022 and December 31, 2022.
California workers’ comp medical mileage requirements [LC §4600(e)(2)] work in conjunction with Govt Code §19820 and Department of Personnel Administration (DPA) regulations. Claims administrators are required to reimburse mileage at the rate adopted by the DPA Director for non-represented (excluded) state employees, which is tied to the IRS published mileage rate.
Annual adjustments to standard mileage rate for business use typically take place at the beginning of each calendar year and are based on an annual study of the fixed and variable costs of operating an automobile, which include the cost of gasoline and depreciation. When it announced the mid-year increase last June, the IRS news release noted that the decision to opt for a special adjustment for the final months of 2022 was made in recognition of recent gasoline price increases. At that point, the average price of a gallon of gasoline in California had already spiked to more than $6 per gallon. Although it has since receded, apparently the recent reduction either did not occur prior to the calculation of the latest increase or failed to offset the steep increases that occurred earlier.
To alert the community, the Institute will also be issuing a Bulletin and a news release on the new rate. We also have advised the DWC of the increase and the Division is expected to issue a Newsline on the new rate once it receives confirmation from the DPA. DWC Newslines are posted at www.dir.ca.gov/dwc/dwc_newsline.html.
The mileage rate has been adjusted multiple times over the past decade, so the DWC has posted downloadable mileage-expense forms in English and Spanish that show applicable rates by travel date under “Medical Forms” on its Forms page (click here). The DWC is expected to post a new form with the revised rate soon, but given the lack of lead time, you should alert your claims staff and system programmers immediately that the mileage rate for medical travel on or after January 1, 2023 will be increasing to 65.5 cents per mile.
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