Mileage Reimbursement Rate To Increase Effective 1/1/08

The Internal Revenue Service has announced that the standard mileage rate for business miles will increase from 48.5¢ per mile to 50.5¢ per mile effective January 1, 2008. As a result, the mileage rate that California workers’ compensation claims administrators pay injured workers for travel related to medical treatment or evaluation of their injuries, regardless of the date of injury, will also need to be increased to match the IRS rate as of January 1, 2008.

The IRS announced the new mileage rate in a news release issued November 27, however, given the post-Thanksgiving timing of the release, it has gone widely unnoticed. The release is posted online at http://www.irs.gov/newsroom/article/0,,id=176030,00.html

California workers’ compensation medical mileage reimbursement requirements, as noted in Labor Code §4600(e)(2), work in conjunction with Government Code 19820 and Department of Personnel Administration regs. They require claims administrators to reimburse mileage at the rate adopted by the Director of the Department of Personnel Administration for non-represented (excluded) state employees, which is tied to the IRS published mileage rate. That rate is based on the IRS’s annual study of the fixed and variable costs of operating an automobile.

The DWC has confirmed that it will issue a Newsline on the 2008 rate change before the end of the year. All DWC Newslines are posted online at dwc newsline. In the meantime, claims organizations may wish to alert their system programmers of the upcoming change.