Patrick Administration Announces $11 Million Workers' Compensation Rate Cut
"This most recent rate cut balances the need to help businesses control costs with the responsibility to 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."
The Workers' Compensation Rating and Inspection Bureau (WCRIB), a private, non-profit association of insurers, requested a 2.3% hike in 2008 workers' compensation rates. Had the WCRIB requests been approved, businesses would have seen the cost of providing compensation benefits to their employees increase by $25 million. The settlement signed today by Commissioner Burnes and Attorney General Martha Coakley calls for a 1.0% average rate reduction. In addition, the agreement further reduces average rates for small businesses, resulting in a statewide average rate reduction of 1.1% - a savings that amounts to approximately $11 million for Massachusetts employers. The new rates go into effect on September 1, 2008.
"The Division of Insurance's objective is to ensure a fair and equitable rate that protects workers without overly burdening employers," said Commissioner Burnes. "The 2008 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, efficient claims management, workplace safety and return-to-work programs were increasingly emphasized. Today's reduction marks the ninth time rates have been cut since 1994 and reflects a total rate decrease of 68% in that same period.
Secretary of Labor and Workforce Development Suzanne M. Bump, who as former co-chair of the legislative Committee on Commerce and Labor, authored the Commonwealth's sweeping Workers' Compensation Reform Act of 1991, noted, "I applaud this decision which stems from systemic improvements made in 1991. We are committed to placing a greater emphasis on safety while continuing to deliver compensation and medical care to workers in a way that is also cost-effective."
Workers compensation insurance provides coverage for lost wages, permanent injuries resulting in loss of function 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 after a rate setting proceeding.