As a Retro participant, you might have heard the term “freeze” used. This refers to a critical financial deadline in the retro cycle.
What Is Freeze?
Each retro plan year, freeze represents the date when claim costs are locked to calculate a refund by L&I. As a July plan participant, this year’s freeze date is Friday, April 3, 2026, and claim costs are captured for the 2022-23, 2023-24, and 2024-25 plan years.
- Claims may remain open
- Additional costs may continue
- But those future costs no longer affect that plan year’s Retro results but could impact refund in subsequent freezes for that plan year.
What Costs Are Included?
As of freeze date, all incurred costs are included in the calculation.
“Incurred” means:
- Amounts already paid, plus
- Outstanding reserves on open claims
Incurred costs may consist of:
- Medical treatment
- Time-loss benefits
- Permanent Partial Disability (PPD)
- Loss of Earning Power (LEP)
- Reserves (open claims only. Closed claims do not carry reserves.)
Why Closure and Reserve Accuracy Matter
Because reserves are included in incurred costs, open claims often have a greater financial impact on totals at freeze. Ensuring appropriate closure or reserve accuracy before the deadline can significantly affect outcomes.
Example Scenario
Two claims have identical paid costs of $30,000 at freeze.
Claim A (Closed)
- Paid costs: $30,000
- Reserves: $0
- Total incurred: $30,000
Claim B (Open)
- Paid costs: $30,000
- Reserves: $40,000
- Total incurred: $70,000
Even if Claim B ultimately settles for less, the $40,000 reserve is included at freeze, increasing incurred-cost totals and potentially reducing the Retro refund for that plan year.
What Employers Can Do Before Freeze
Employer engagement before freeze can influence actions taken and affect outcomes before freeze to make a measurable difference in Retro performance.
Engagement may include:
- Providing modified duty opportunities
- Responding promptly to information requests
- Supporting return-to-work efforts
- Participating in claim-strategy discussions
Key Takeaways
- The freeze locks in costs, not claim status
- Incurred costs include paid amounts and reserves
- Closed claims carry no reserves
- Reserve accuracy on open claims matters
- Employer involvement before freeze can impact results
If you would like to review specific claims before the April 3 freeze, please contact your Claims Manager.