Oregon Workers’ Compensation Costs To Decrease About 6%

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Employers in Oregon will pay nearly 6 percent less on average for workers’ compensation coverage in 2009, the Department of Consumer and Business Services announced.

The reduction in the workers’ compensation “pure” premium rate in 2009 marks the third straight year for a rate decrease and the 19th consecutive year with no rate increase. Since 1991, Oregon’s workers’ compensation costs have declined nearly 62 percent, saving Oregon employers $16.4 billion, while benefits and services for workers have improved, DCBS said
.
The pure premium rate is the base rate employers pay their insurance company for workers’ compensation coverage. On average, Oregon employers can expect a 5.9 percent decrease in pure premium in 2009, but some employers will see rates go up and others may see no change. The department sets the pure premium rate based on a recommendation from the National Council on Compensation Insurance Inc. (NCCI).

NCCI looks at various trends in claims experience and benefits to
forecast “loss costs” – or the estimated cost of injury and illness claims in Oregon. NCCI forecasted a 5.9 percent decrease in loss costs because claims frequency and costs per claim are continuing to decline while medical costs are increasing but at a slower rate.

“Employers and workers in Oregon have worked hard to make their workplaces safer, and it has resulted in fewer, less severe injuries, said Cory Streisinger, DCBS director, adding that workplace injury and illness rates in the state have declined more than 10 percent since 2004 and more than 50 percent since the late 1980s. Medical costs also constitute a large piece of the pure premium rate. The department has taken several steps to reduce medical costs in workers’ compensation, such as lowering pharmacy fees, encouraging the use of generic drugs, and working with the Workers’ Compensation Medical Advisory Committee to screen the use of
new and experimental medical procedures.

The department also announced that two workers’ compensation fees will remain unchanged next year. The workers’ compensation premium assessment, which pays for the administration of workers’ compensation and workplace safety programs, is proposed to remain at 4.6 percent in 2009 (4.8 percent for self-insured employers
and employer groups). The Workers’ Benefit Fund assessment, which pays for special benefits for injured workers and their employers, will remain at 2.8 cents-per-hour worked in 2009. Employers and workers each pay half of the Workers’ Benefit Fund assessment. Neither the premium assessment nor the Workers’ Benefit Fund assessment have increased in the past seven years.
The pure premium rate and the Workers’ Benefit Fund assessment go into effect Jan. 1, 2009.

The DCBS will hold a hearing to invite public comment on the premium assessment recommendation at 2 p.m. on Sept. 22, 2008 in Salem, Ore. For more information, visit www.dcbs.oregon.gov.