Rate Settlement Saves $80 Million in Workers’ Compensation Premiums
Insurers agree to a rate increase of 1.5 percent in place of much higher request
Boston, MA (April 20, 2016) - The Baker-Polito Administration announced today that workers’ compensation rates will rise only an average 1.5 percent beginning July 1st of this year. The nominal increase is the result of a settlement between the Division of Insurance’s State Rating Bureau, the Workers’ Compensation Rating and Inspection Bureau (WCRIB), and the Office of the Attorney General.
The settlement reduced the WCRIB’s original request from 6.4 percent, saving approximately $50 million annually in Massachusetts workers’ compensation premiums. Another $30 million in premiums was averted as a result of an agreement to remove an experience rating offset proposal from the WCRIB’s original rate filing.
“This is welcome news for employers both large and small in the Commonwealth,” said John Chapman, Undersecretary for the Office of Consumer Affairs and Business Regulation. “We’re pleased that our workers’ compensation system is a healthy one and that our workforce can be reassured that a stable safety net is there when it’s needed.”
“In a time when the costs of doing business continue to be a challenge, I’m pleased that our State Rating Bureau worked convincingly to broker an agreement on this important and mandatory insurance coverage. This is an outcome that has a substantial positive impact for Massachusetts businesses,” said Daniel Judson, Commissioner of Insurance.
In the Massachusetts workers’ compensation system, rate changes vary for individual classes of employment. As a result of this agreement, the maximum rate increase for any class was reduced by 15 percent. With the rates now approved by the Commissioner, insurers may submit downward deviation requests that could lower rates for some employers. Currently about 50 insurers offer such reductions, which range from a few percentage points to over 25 percent.
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