Higher claims experience and a new law will likely cause a double-digit rise in Missouri's workers' compensation rates next year, a new report says.

The National Council on Compensation Insurance says that, in addition to a 7.6 percent rise in claims costs, rates will be impacted by a new law that shifts some type of injury claims from a so-called "Second Injury Fund" to the main fund. NCCI estimates that the law will raise annual costs an additional 3 percent.

Moreover the new law allows state officials to impose an additional 3 percent surcharge on workers' comp premiums in 2014 to help replenish the Second Injury Fund.

All told, NCCI says a business could face a nearly 15 percent increase in costs related to workers' comp insurance if its individual rates follow the general NCCI cost projections. The actual premium costs will vary both by categories of business and by a particular business' claims history, NCCI notes.

Officials said that Missouri's projected cost increases are far larger than in most states, and represent the highest increases since the state's 2005 reforms.

NCCI says loss experience improved since the reforms, but has deteriorated over the past two years. The report says Missouri is experiencing growth in both the number and size of large losses (defined as greater than $500,000), including growth in the number and size of large losses exceeding $3 million.

The report also says lost time claim frequency, which has declined steadily in Missouri for many years, has seen that decline flatten out some in the more recent years.

Moreover, medical expenses make up 63 percent of the total benefit dollar in Missouri, the report indicates. "Medical cost per case has increased considerably and does not show signs of abatement," the report says. "In the past, declining claim frequency offset rising costs, however, this is no longer case." 

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