North Dakota Employers’ Workers’ Comp Bills Likely to Rise

Eight months after North Dakota voters gave Gov. John Hoeven the final word on state workers’ compensation rates, employers’ insurance bills are likely to rise due to the recent bleak market for investments.

Hoeven adopted an advisory board’s recommendation that the Workforce Safety and Insurance agency forego dividend credits on business’ insurance bills during the 2009-2010 billing period. The advisory board found that WSI’s investment surplus was not large enough to justify a dividend. Board members decided against a $9 million dividend, which would have reduced insurance bills by about 1.2 percent. The governor said he hopes WSI will be able to resume dividend payments as the economy recovers.

The dividends have knocked almost $274 million from insurance costs for businesses in the last four years, WSI figures show. They reduced costs by $97.5 million in the current year, cutting employers’ bills by as much as 62 percent.

A new insurance rate schedule that takes effect July 1 will decrease average rates by 5 percent, with a maximum possible increase of 10 percent, the agency says, but the decreases may not offset the loss of the divendends.

North Dakota businesses are required to buy the insurance, which covers almost 20,000 employers. The new rates are expected to bring in $156 million from July 1 through June 30, 2010; the current rate schedule brought in almost $143 million, according to WSI estimates.