Oregon Report: Workers’ Comp Increases Coming

More data is power, but then again knowledge goes only so far – especially in workers’ compensation.

A report out on Tuesday shows continued workers’ comp rate decreases on average countrywide through 2011, but don’t expect that to continue, one of the report’s authors said.

“What sort of surprised me was that pretty much everyone has continued to go down, to decrease,” said Jay Dotter, co-author of Oregon’s 2012 Workers’ Compensation Premium Rate Ranking Study.

The report uses National Council on Compensation Insurance risk classification codes and information gathered directly from the states themselves. Tuesday’s report is an updated and fully expanded version of a report put out earlier.

“We were expecting to see a swing around, to see things start increasing,” Dotter said.

The report’s national median rate index has been on the decline since the early 1990s. In 2012, the national median rate index was $1.88 per $100 of payroll. The national median rate index peaked in 1994 at $4.35. It is currently at its lowest since the inception of the report, which was launched in the late 1980s to provide data to help Oregon’s government figure out something they kind of already knew – the state’s workers’ comp rates were far too high.

“They needed good data to make decisions,” Dotter said of those who conceived the report, which is issued once every other year. “After that they came up with a series of modifications in the program to cut down on wasted expense. It’s not just one thing that we changed, there were quite a few different features that have created what some have called a model system.”

See a table ranking all the states

Dotter noted that Oregon’s rate index was 16 percent below the national median in 2012. The state’s rate index had peaked at 49 percent above the median in 1990.

The state’s employers on average pay the nation’s 39th highest workers’ comp premium rates, meaning 38 states had higher rates in 2012. Oregon ranked 41st in 2010.

The premium rate index in Oregon is $1.58, and indices range from $1.01 per $100 of payroll in North Dakota to $3.01 in Alaska. Since 2004 the range between the highest and lowest-cost states has been narrowing, according to the report.

Dotter, a research scientist who spent nine years in the oil industry as exploration geologist before coming to Oregon, said the report works to spur those states with poor rankings, and he suggested states that are doing exceptionally well may be taking that for granted.

“If you look at the previous reports and look at top 10, the top 10 tend to drop,” Dotter said. “Those at the very top tend to drop more.”

And the rate at which rates have dropped has been tapering off. In fact, Dotter, who expected to see increases by now, said “we’ll see definitely increase in 2014.”

He based that assessment on an examination of the notices that come out from different states announcing what is happening with workers’ comp premiums.

“We’re expecting it to go up as of 01/01/2012,” he said. “It hit bottom and is starting to go back up again. I expect it to start moving up.”

Topics Workers' Compensation Oregon