Massachusetts to Keep Workers’ Comp Rates at Current Levels

The Massachusetts Division of Insurance (DOI) announced on March 21 that it has reached a settlement with the Workers’ Compensation Rating and Inspection Bureau (WCRIB) and the Massachusetts Attorney General’s office to keep the state’s workers’ comp rates at current levels.

The WCRIB originally filed in December to raise the state’s average worker’s comp rate by 7.7 percent. Massachusetts Attorney General’s office has fought against the proposed rate increase and argued that the rate request was unjustified because it was based almost primarily on an increased profit load.

After a month-long hearing process among DOI, the Attorney General’s office and the WCRIB on behalf of its members, the three parties reached a settlement keeping rates virtually unchanged.

By keeping the rates at current levels, businesses across the state will save about $77 million, DOI officials said. Rates for workers’ comp insurance are set at least every other year in an administrative rate hearing before the state’s insurance commissioner.

As part of the settlement, the parties have agreed to modify the classification of certain employer groups to allow more accurate prediction of workers’ comp losses. Officials said this adjustment may cause fewer than 2 percent of employers to see an adjustment in their rates. According to WCRIB, approximately 141,000 Massachusetts employers carry workers’ comp coverage.

“Our aim when reviewing rate requests is to ensure affordability for those buying insurance while also maintaining a financially stable insurance market in the Commonwealth,” Massachusetts Insurance Commissioner Joseph G. Murphy said.

Workers’ comp rates were last raised in 2001 by one percent. Since then, rates have declined by nearly 25 percent, according to the DOI announcement.

DOI said ensuring that workers’ comp insurance rates are not excessive is consistent with Massachusetts Gov. Deval Patrick administration’s broad efforts to contain insurance costs for consumers and businesses across the state.

“As the Commonwealth continues to address high unemployment, this is not the time to unfairly increase these costs for the private sector, especially for the small business community,” Massachusetts Attorney General Martha Coakley said in a statement following the DOI’s announcement. “We believe the proposed rate hike was completely unjustified and are pleased to see that rates will now be applied more fairly.”