Connecticut Eyes 9.8% Cut in Workers’ Compensation Costs

Connecticut workers’ compensation insurers are recommending an overall 9.8% reduction in loss costs in the voluntary market and a 10.5% overall reduction in the assigned risk market.

The rate filing submitted to the Connecticut Insurance Department by the insurers’ National Council on Compensation Insurance (NCCI) anticipates an effective date of January 1, 2024.

According to NCCI, the filing is based on premium and loss experience as of year-end 2022 from policy years 2020 and 2021 and shows improved experience relative to the organization’s 2023 rate filing.

The 2024 proposed loss cost decrease is primarily driven by changes to the average cost per lost-time claim, along with a proposed decrease to the medical loss ratio trend projection — two trends NCCI said it expects will continue.

The proposed loss cost level change also includes an update to the loss adjustment expense component and a small increase to medical benefits due to an update to the medical fee schedule.

The proposed change to the assigned risk rates in part reflects a decrease in assigned risk expenses.

Due to the catastrophic nature of the COVID-19 pandemic, NCCI said all reported COVID-19 claims were excluded from ratemaking in this filing.

The 2024 rate filing continues the downward trend of recent years.

For 2023, the state allowed NCCI’s proposed overall average change of -3.0% to the voluntary loss costs and no change to the 2023 assigned risk rate level.

Workers’ compensation costs also fell in 2022. Voluntary loss costs went down 14.1%, while assigned risk rates fell 8.2%, upon NCCI’s recommendation.

Each workers compensation insurer must add other costs including commissions and taxes to the approved loss costs to compute the final workers compensation rates it intends to charge.

Employers unable to obtain coverage in the voluntary market can apply for coverage in the assigned risk market.

Topics Workers' Compensation Talent Connecticut