Even in these tough economic times, there is good news to be found in some places. For Vermont employers, their operating budgets will soon be benefiting from a decrease in workers' compensation premium rates. New rates approved by the state's Department of Banking, Insurance, Securities and Health Care Administration (BISHCA) that go into effect on April 1 will reflect the largest average rate decrease in the state since 1997.
Rates in the voluntary market will decrease by an average of 13 percent. Rates in the assigned risk market — the market of last resort for employers unable to obtain coverage in the voluntary market — will decrease by an average of 9.6 percent.
Two separate state agencies share regulatory oversight of Vermont's workers' compensation system. BISHCA regulates issues relating to insurers and the insurance market, and the Vermont Department of Labor handles program administration and claim issues.
Vermont's workers' compensation system is similar to that of most states, requiring companies to purchase workers' compensation insurance if they hire one or more employees on a full- or part-time basis in the state, or if they hire employees outside the state who perform work in Vermont. The state is authorized to shut down and/or fine employers who fail to adhere to coverage requirements. In addition, the owners and/or officers and majority stockholders may find themselves personally liable for any benefits owed to the injured employee. Criminal prosecution, including imprisonment and fines, also are possible.
As in other states, some jobs and positions may be exempt from coverage. In Vermont, allowable exemptions include sole proprietors or partners of an unincorporated business; officers of a corporation who choose to be excluded; family members who work for the company and live with the owner; people whose employment is of a casual nature and not for the purpose of the employer's trade or business; people engaged in amateur sports, even if an employer contributes to the support of such sports; people engaged in agriculture or farm employment for an employer whose aggregate payroll is less than $10,000 in a calendar year, unless the employer chooses to provide coverage; commissioned real estate people; certain elected officials; and volunteers.
Workers' compensation is not the only insurance product bringing good news to Vermonters. The Green Mountain state recently earned accolades — along with Arizona, Idaho, and Utah — for having "the most open and competitive regulatory environments for property insurance." In a state-by-state survey conducted by the Competitive Enterprise Institute and authored by CEI fellows Eli Lehrer and Michelle Minton, Vermont was identified as having the most competitive regulatory environment in the nation. This is the second year that Vermont has won top honors in the survey. The state was cited for its ability to attract new companies and its choice to allow insurers to use broad territorial rating factors in determining rates.
"Vermont is a haven for homegrown insurance companies: Every nationally recognized insurance company does business there, and these national providers compete vigorously for market share with a number of Vermont-focused companies," Lehrer and Minton wrote.
The good news stretches into Vermont's overall job market, as well. While unemployment continues to be a concern across the nation, Vermont is doing well compared to most of its closest neighbors. Although December numbers (the latest national data available) show seasonally adjusted unemployment rose 6.4 percent in Vermont, the state had the lowest unemployment rise in the region, save for New Hampshire, which posted a 4.6 percent increase. Connecticut, Maine, Massachusetts, New Jersey and New York all posted numbers in the high six percent, low seven percent range. Rhode Island was hardest hit, showing a double-digit unemployment increase of 10 percent.
The total Vermont labor market fluctuates between 300,000 and 350,000 depending on variables such as seasonal adjustment rates; the Burlington-South Burlington area has a third of those workers.
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