Oregon Workers’ Comp Costs to Drop 11th-Straight Year

Oregon employers will pay on average less for workers’ compensation coverage, according to an update from the Oregon Department of Consumer and Business Services.

The decline marks 11 years of average decreases in the pure premium rate – the base rate insurers use to determine how much employers must pay for medical costs and lost wages, the department said.

Long-term trends in the update include:

• Employers would pay on average 90 cents per $100 of payroll for workers’ comp costs in 2024, down from 93 cents in 2023, under a proposal by DCBS. That figure covers workers’ comp claims costs, assessments, and insurer profit and expenses.
• The pure premium rate would drop by an average 6.7% under the proposal. The pure premium will have declined by 49% from 2015 to 2024.

The reduction in costs is due to an improvement in loss experience and loss development patterns in Oregon, according to the National Council on Compensation Insurance.

Employers’ total cost for workers’ compensation insurance includes the pure premium and insurer profit and expenses, plus the premium assessment. Employers also pay at least half of the Workers’ Benefit Fund assessment, which is a cents-per-hour-worked rate.

The decrease in the pure premium of 6.7% is an average, so individual employers may see a larger or smaller decrease, no change or an increase, depending on an employers’ industry, claims experience, and payroll. Also, the pure premium does not take into account the varying expenses and profit of insurers or individual policyholders’ experience modification, if eligible.

The decrease in the pure premium will be effective Jan. 1, 2024, but employers will see the changes when they renew their policies in 2024.

Topics Workers' Compensation