Average workers’ compensation insurance premium rates will not increase in the coming year, announces the Department of Labor and Industries.
The average workers’ compensation premium rate will not increase in 2021. It’s the fourth year in a row of no increases in the rates. Last year, there was a 0.8% decrease in the average amount employers paid for the coverage. L&I cut rates by 5% in 2019 and 2.5% in 2018.
With no increase in the overall rate change, the average premium per employee is not expected to change overall. However, there will be rate changes depending on the type of industry and the employer.
In a Q and A section accompanying the announcement, the department explains,
Financial projections pointed to the need for a rate increase in order to cover the costs of claims that occur in 2021, but the agency will use funds from the workers’ compensations contingency reserve to cover additional costs for 2021. These funds were built through reductions in claim liabilities. L&I has accomplished this by reducing long-term disability through best practices and improving processes to help workers recover sooner. Businesses and workers have helped by focusing on safety. Small rate increases in previous years and strong investments have also helped build reserves, allowing for rate decreases over the last 3 years, and holding rates steady in 2021.
The Seattle Times reports,
In recent years, the agency said, it has made small reductions but avoided larger cuts in rates, in order to build up reserves to the fund that pays workers’ compensation claims in the state for companies that don’t self-insure. Last year, there was a 0.8% decrease in the average amount employers paid for the coverage. L&I cut rates by 5% in 2019 and 2.5% in 2018, according to L&I.
While there won’t be an overall rate change for 2021, individual employers may see their rates go up or down, depending on their recent claims history and changes in the frequency and cost of claims in their industry risk classes, the agency said.
Note also that Washington has the nation’s highest workers’ compensation benefit costs.