Premiums for workers’ compensation insurance next year will increase for the first time in three years the Department of Labor and Industries announced this week. The average 2.7-percent rate increase for 2014 premiums is an increase of less than two cents per hour worked.
L&I confirmed the rates that had originally been proposed in September.
Rates are different for each individual risk classification. Within construction the changes range from a decrease of 12% for the bridge bulkhead and tunnel classification to an increase of 18% for the concrete work – foundations and flatwork classification. (See rates for construction-related classifications here.)
This modest increase in rates is part of a long-term plan to ensure steady and predictable rates by benchmarking against wage inflation” said L&I Director Joel Sacks. “It will also help to gradually rebuild the workers’ comp reserves.”
Noting that the 2011 reforms are projected to save approximately $150 million in the fiscal year that ends next July Sacks said the agency will do even more to reduce costs. “We are looking at every step in the claims process for ways to lower costs while getting better results for injured workers. We’ve committed to reducing costs by $35 to $70 million by June 2014 through initiatives that improve efficiency and address the needs of our customers” he added.
The proposed rate increases are smaller than what was anticipated earlier this year when it appeared that double-digit increases would be needed to build up the systems reserves.
“We appreciate that Director Sacks is looking at the cost side of the ledger and we’re also pleased that AGC-backed reforms passed by the Legislature in 2011 are having some positive impact” said AGC Executive Vice President David D’Hondt. “But we think more can be done to build up the system’s reserves — understandably depleted during the recession — by decreasing costs. For example the next Legislature should pass additional reform legislation to remove the arbitrary 55-year-old age limitation on structured-settlement availability. By enacting this and other reform measures the Legislature can decrease the pressure to raise rates on employers and workers.”