Governor Patrick Announces Businesses to Save $22.5 Million after Agreement on Workers' Comp Rates
Original request for 4.5 percent increase negotiated to a 2.4 percent decrease by Administration's Division of Insurance
"This rate cut balances the need to help businesses control costs and provide employees with appropriate benefits," said Governor Patrick. "Lowering the cost of workers' compensation insurance is very much in keeping with our larger goal of improving the state's business climate so that we can grow the economy and create jobs."
Originally the Workers' Compensation Rating and Inspection Bureau, a private, not-for-profit organization of Massachusetts workers' compensation insurers, had asked for a 4.5 percent increase in rates. Based on the projected workers' compensation premiums of $935 million, the jump would have cost businesses about $42 million. Instead, when the rates go into effect Sept. 1, 2010, companies will see the 10 th reduction in workers' compensation rates in Massachusetts since 1994.
"The Division of Insurance's objective is to ensure a fair and equitable rate that protects workers without overly burdening employers," said Barbara Anthony, the Undersecretary of the Office of Consumer Affairs and Business Regulation, which includes the Division of Insurance. "The 2010 rate cut offers further proof that reforms have created efficiencies within the system that continue to produce savings for businesses."
As part of a comprehensive overhaul of the workers' compensation system in 1991, the state began focusing on efficient claims management, workplace safety and return-to-work programs. The rates have been slashed 19.7 percent by the Patrick Administration, and a 2009 study by the Oregon Department of Consumer and Business Services found that Massachusetts has the third-lowest workers' compensation rates in the country.
Workers' compensation insurance provides coverage for lost wages, permanent injuries and medical care for workers injured on the job. Massachusetts businesses are required to carry workers' compensation insurance. The Division of Insurance sets the rates through a rate-setting proceeding. The stipulation that creates the 2.4 percent decrease includes input from the WCRIB and the Attorney General's Office.