Here's some welcome news for Massachusetts employers.
On April 20, the state's Division of Insurance announced that Workers' Compensation rates will rise only an average 1.5% beginning July 1. The minimal increase is thanks to 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 WCRIB originally requested an increase of 6.4%. As a result of the settlement, however, employers in Massachusetts will save approximately $50 million annually in Workers' Compensation premiums. The WCRIB's original rate filing also included an experience rating offset proposal. This proposal was removed from the final settlement, resulting in an additional savings to employers of $30 million in premiums.
"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, in announcing the settlement. "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."
Commissioner of Insurance Daniel Judson said, "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."
The agreement notes that, in addition to keeping the average rate increases to 1.5%, the underwriting profits will be zero percent, and the selected average commission rate, excluding expenses, will be 6.27%.
Now that the commissioner of insurance has approved the Workers' Compensation rates, insurers may submit downward deviation requests that could lower rates for some employers. According to the Massachusetts Department of Insurance, currently about 50 insurers offer such reductions, which range from a few percentage points to more than 25%.
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