Oregon employers to pay less for workers’ compensation in 2007

October 9, 2006

Oregon will reduce the workers’ compensation pure premium rate by 2.1 percent for 2007, maintaining Oregon’s streak of not raising the rate in 16 years, Gov. Ted Kulongoski recently announced.

“No other state in the union has seen 16 consecutive years without a rate increase, and no other state in the union has seen rates decrease like this while benefits have actually gone up,” the governor said. Since 1990, he added, rates decreased for 12 straight years, then flattened out for four more years.

Many observers expected the streak to end, but it has not. In 2007, Oregon’s employers will pay 40.6 percent less per $100 of payroll for workers’ compensation insurance than employers in California, and 9.4 percent less than those in Washington. Since 1990, cuts in premium rates have saved Oregon’s employers a record $12.8 billion, according to the state’s Department of Consumer and Business Services.

“This is good news for employers, and great news for our overall economy,” the governor said. “But it’s great news for Oregon’s workforce, as well. Lower workers’ compensation costs help us attract and retain businesses, and help businesses create and retain jobs. And that’s what puts more Oregonians to work.”

On average, Oregon employers can expect a 2.1 percent decrease in pure premium, but not all employers will see rates drop. Specific cost changes vary by business, depending on the employer’s industry, claims experience, workforce and other factors. The pure premium rate, which the state sets, represents workers’ compensation insurance costs before insurance carriers’ expenses and profit are added.

Two additional workers’ compensation fees will drop next year as well. The workers’ compensation premium assessment, which pays for the administration of workers’ compensation and workplace safety programs, is proposed to decrease to 4.6 percent in 2007, from the present rate of 5.5 percent. Self-insured employers and employer groups will pay 4.8 percent next year, down from 5.7 percent. The more than 16 percent reduction brings the assessment to its lowest level in 10 years, DCBS indicated.

The Workers’ Benefit Fund assessment, which pays for benefits to injured workers, will drop to 2.8 cents per hour worked in 2007, down from 3 cents per hour worked. In total, Oregon’s employers will pay $44 million less in combined workers’ compensation premium and state assessments in 2007, due to the new reductions.

“This is a credit to Oregon employers and employees who work together to maintain safe work environments,” Kulongoski said. He pointed out that employers, employees, state government, and workers’ compensation insurers have worked cooperatively to adopt measures and programs that return injured workers to work faster and manage claims more efficiently and quickly.

Cory Streisinger, DCBS director, said recent legislation has provided higher disability benefits to workers and greater protections during independent medical exams. “We continue to work with the Management-Labor Advisory Committee to find additional ways to improve the system.”

DCBS is the state’s largest business regulatory agency. It administers state laws and rules, and protects consumers and workers in the areas of workers’ compensation, occupational safety and health, financial services, insurance, building codes, and targeted contracting opportunities for small business. For more information, visit www.dcbs.
oregon.gov.

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