Vermont businesses will see another rate decrease in workers’ compensation insurance in 2023. This will mark the seventh consecutive year of rate reductions.
The loss cost decrease of an average 6.7%, which takes effect April 1, will save Vermont employers more than $11 million in premiums in 2023, according to Department of Financial Regulation (DFR) Commissioner Kevin Gaffney.
The 2023 rate reduction follows years of decreasing loss trends: -2.5 percent for indemnity (wage replacement) and -3.0 percent for medical claim costs in 2023.
About 90% of Vermont employers acquire voluntary market coverage. In the assigned risk market for employers unable to obtain coverage in the voluntary market, rates will decrease by an average of 6.9% this year.
Vermont businesses saw an average workers’ compensation rate decrease of 4.9% in 2022.
The approved loss costs for 2023 are lower than those recommended by the industry rating organization, the National Council on Compensation Insurance (NCC). NCCI had filed for a 4.0% reduction in the voluntary market (compared to the final 6.7%), and a 4.2% reduction in the residual market loss costs (compared to the 6.9% cut approved by DFR).
According to Gaffney, the differences are attributable to DFR adjusting the weight given 2020 experience data.
Rate changes vary by industry and classification. State officials said that some sectors of the skiing industry will experience rate reductions of 5% to 16%, while the dairy farming industry will see rate relief between about 6% and 7%. Breweries can expect rate decreases of about 15%.
Gaffney said his department expects the trend of decreasing claim frequency to continue.
A DFR history of recent rate activity in Vermont for the voluntary and assigned risk markets can be found below:
|Effective Date||Loss Cost Change||Assigned Risk Rate Change|
For additional background, see National Council on Compensation Insurance (NCC): Vermont Workers Compensation System Overview January 2022
Was this article valuable?
Here are more articles you may enjoy.