The Oregon Department of Consumer and Business Services has published its biannual study since 1968
As it has done in each even-numbered year since 1968, the Oregon Department of Consumer and Business Services has published its biennial look at worker’s compensation rates. Utilizing classification codes from the National Council on Compensation Insurance, the study incorporates methods that create a constant set of risk classification codes that allow for each state’s worker compensation rates to be evaluated and ranked on a comparable basis.
The study then examines the workers’ compensation rates in each state by calculating individual employer’s costs according to experience ratings, premium discounts and other factors. For this year’s report, rates effective January 1, 2016 were used and were $1.84 which represented the median value.
According to the Oregon Department of Consumer and Business Services, this number represents a drop of less than 1 percent from the 2014 median value which was $1.85. The following map outlines Workers’ Compensation premium index rates for the 50 states and the District of Columbia:
How Massachusetts fares in the 2016 Study
Overall, the results of this year’s biennial study show that Massachusetts continues to rank as one of the states with the lowest worker’s compensation rates in the country. Returning to a spot higher than its place in the the 2012 study, and four spots higher from its perch in the 2014 study, Massachusetts has claimed the 44th spot in the 2016 study. This, in spite of the 1.5% rate increase approved by the Division earlier this year that went into effect as of July 1, 2016.
The states with the highest and lowest workers’ compensation rates
While Massachusetts ranks as one of the states with the lowest levels of workers’s compensation rates, North Dakota is again the cheapest state for rates in the country. At the opposite end of the spectrum from North Dakota, California has again been named as the state with the highest workers’ compensation rates in the country. Both states claimed these same spots in the 2014 study.
As for the other New England states, Connecticut is the most expensive, ranking as the fourth most expensive state nationally for worker’s compensation rates. Following Connecticut, Rhode Island is the second most expensive state in New England for workers’ compensation rates, ranking 9th nationally, while Vermont and Main tied for the third spot in New England, having both ranked 14th nationally. After those two, New Hampshire comes in as the fourth most expensive state in New England for workers’ comp. ranking 17th nationally, with Massachusetts ending (or leading) the pack with the cheapest rates, ranking 44th nationally.
For those interested in seeing how all 50 states ranked, the following chart, courtesy of the Oregon Department of Consumer and Business Services, provides that listing:
More about Massachusetts’ results
After the 2012 study, Agency Checklists queried the Division of Insurance as to what factors were important to Massachusetts being ranked as one of the states with the lowest rates for workers’ compensation rates. In response, the Division said that Massachusetts’ success in keeping its workers’ compensation rates down can be attributed to various factors including increased safety awareness in the workplace, a shift in the population to less hazardous occupations, and the workers’ compensation reforms instituted by the Commonwealth in 1991. In addition, the DOI also noted that restructuring workers’ compensation by reducing the maximum penalty for losses from 49 percent to 25 percent and lowering charges for small businesses also has helped. It could be argued that those reasons continued to be true today in view of the 2016 study results.
