Workers' compensation costs will decrease an average 7.6 percent in 2014, thanks to lower medical costs and fewer and smaller claims for lost wages, the Department of Consumer and Business Services (DCBS) announced today.
The department approved the average decrease in "pure premium," which is the portion of the premium employers pay insurers to cover anticipated claims costs for job-related injuries and deaths.
Workers' compensation pays injured workers for lost wages as well as for medical care for job-related injuries. The decrease in costs is across all industry sectors, but particularly in manufacturing and construction.
"Oregon's focus on improving worker safety and getting injured workers treated and back on the job quickly makes a difference," DCBS Director Patrick Allen said. "And, we're starting to see medical cost control strategies pay off."
The decrease is based on a recommendation from the Florida-based National Council on Compensation Insurance Inc. (NCCI), which analyzes industry trends and prepares rate recommendations for the majority of states.
Pure premium reflects only a portion of workers' compensation costs but is the key factor behind annual cost changes. The decrease is an average, so an individual employer may see a larger decrease, no change, or even an increase depending on the employer's own industry, claims experience, and payroll. Also, pure premium doesn't take into account the varying expenses and profit of insurance companies.
The rate decrease is effective Jan. 1, 2014, but employers will see the changes when they renew their policies in 2014.
Even before the decrease, Oregon's workers' compensation premium rates ranked low nationally. Only 11 states and the District of Columbia had average rates lower than Oregon at the beginning of 2012, the most recent state-by-state comparisons.