Oregon Workers’ Comp Costs to Drop for 9th Year

September 20, 2021

Oregon employers will pay on average less for workers’ compensation coverage in 2021, the Oregon Department of Consumer and Business Services announced earlier this month.

The decline in costs marks nine 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, according to the DCBS.

The bureau says that underpinning the cost decreases is the success of Oregon’s workers’ comp system, which includes programs to control costs, maintain good worker benefits, ensure employers carry insurance for their workers, and to improve workplace safety and health.

Employers, on average, will pay 97 cents per $100 of payroll for workers’ comp costs in 2022, down from $1.02 in 2021, under a proposal by DCBS. That figure covers workers’ comp claims costs, assessments, and insurer profit and expenses.

The pure premium rate will drop by an average 5.8% under the proposal. Pure premium — filed by a national rate-setting organization and reviewed by DCBS — will have declined by 51% during the 2013 to 2022 period.

The reduction in costs is due to a continued downward trend in Oregon’s lost-time claim frequency and downward trends in claim severity and medical costs, according to the National Council on Compensation Insurance.

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

The decrease in the pure premium will be effective Jan. 1, 2022, but employers will see the changes when they renew their policies in 2022. The assessment changes will be effective Jan. 1, 2022.