0

Information pertaining to the workers’ compensation rates of the ten states identified is detailed below. The rates vary between states. The majority of the states base the rates on the recommendation of the National Council of Compensation Insurance. California, Pennsylvania, and New York use their own rating systems. Wyoming presents as somewhat unique, being the only state with a monopolistic workers’ compensation insurance. New York is the most expensive state of those considered for workers’ compensation insurance. Texas is the only state that did not require businesses to carry workers’ compensation insurance. To enable comparison between the states, the current clerical and labor average rates have been provided.

California Workers’ Compensation Rates

  • In California the workers’ compensation rate is determined by Insurance Commissioner based on a recommendation of the Workers’ Compensation Insurance Rating Bureau (WCIRB). The WCIRB typically submits a recommendation in August for the next year. Public hearings are then held before the Insurance Commissioner sets the advisory rate for the next year.
  • Workers’ compensation rates have been falling in California, with a 47% decrease since 2015.

CURRENT

  • The recommendation of WCIRB for 2020 was an average rate of $1.67 per $100 of payroll. The Insurance Commissioner set the average rate at $1.52 per $100 of payroll. A list of the 2020 rates for the different codes is available here.

HISTORIC

  • The recommendation of WCIRB for 2019 was an average rate of $1.70 per $100 of payroll. The Insurance Commissioner set the average rate at $1.63 per $100 of payroll.
  • The average rate set by the Insurance Commissioner in 2018 was $1.68 per $100 of payroll.
  • In 2017, the Insurance Commissioner set the average rate at $2.29 per $100 of payroll.

FUTURE

  • The recommendation of WCIRB for 2021 was an average rate of $1.56 per $100 of payroll. The Insurance Commissioner’s decision on the 2021 rate is imminent.

Florida Workers Compensation Rates

  • Florida requires all businesses with four or more employees to carry workers’ compensation insurance.
  • Florida’s Insurance Commissioner makes a decision on the rates based on the recommendation of the National Council of Compensation Insurance (NCCI). This is expressed as a percentage increase or decrease statewide.

CURRENT

  • The average workers’ compensation rate for Florida in 2020 is $1.66 per $100 of payroll. The 2020 list of worker compensation rates for Florida is available here.

HISTORIC

  • In 2019, the average workers’ compensation rate in Florida was $1.78 per $100 of payroll. The 2019 list of worker compensation rates for Florida is available here.
  • In 2018, the average workers’ compensation rate in Florida was $1.81 per $100 of payroll. The 2018 list of worker compensation rates for Florida is available here.

FUTURE

  • The NCCI has recommended a 5.7% decrease in workers’ compensation rates for Florida in 2020. This would see an average rate of $1.57 per $100 of payroll. Florida’s Insurance Commissioner is yet to make a decision.

Texas Workers Compensation Rates

  • Unlike most of the other states, Texas does not require businesses to have workers’ compensation insurance. Employers are required to disclose if they carry workers’ compensation insurance. Not having workers’ compensation insurance exposes companies to legal action in the event of a workplace injury.
  • An appointed Commissioner of the Division of Workers Compensation monitors the rates in Texas. The workers’ compensation rates are based on one of three guides in Texas:
    • Texas workers’ compensation classification relativities established by the Commissioner of Insurance;
    • The insurance providers own independent company-specific relativities filed by the company; or
    • Loss costs filed by the NCCI.

CURRENT

  • The 2020 NCCI loss costs are available here. The 2019 Commissioner of Insurance relativities are available here. A law change in Texas means that the Commissioner of Insurance is no longer required to file relativities, the last relativities are those of 2019. Despite an extensive search of the Texas Department of Insurance decisions and press releases, no records relating to the workers’ compensation rate changes could be identified.

HISTORIC

  • The 2019 NCCI loss costs are available here. The 2018 Commissioner of Insurance relativities are available here.
  • The 2018 NCCI loss costs are available here. The 2017 Commissioner of Insurance relativities are available here.

FUTURE

  • The 2020 NCCI loss costs will extend until 30 June 2021. The new loss costs will be filed in early 2021.

COMPARATIVE RATES

  • The average rate for clerical workers in Texas as at June 2020 was $0.07 per $100 of payroll while the average rate for laborers was $13.29 per $100 of payroll.

Michigan Workers Compensation Rates

  • In Michigan, workers’ compensation insurance is required by businesses that have three or more employees or one employee working over 35 hours per week.
  • The Compensatory Advisory Organization is responsible for setting the advisory rates in Michigan.

CURRENT

  • The 2020 Michigan workers’ compensation rates are available here. In 2020, the workers’ compensation rates fell an average of 3.3%. This represented a decrease of an average of 4.7% for manufacturing, 3.3% for contracting, 2.9% for office & clerical, 4.6% for goods & services, and 0.1% for miscellaneous.

HISTORIC

  • The 2019 Michigan workers’ compensation rates are available here. In 2019, the workers’ compensation rates fell an average of 8.3%. This represented a decrease of an average of 7.4% for manufacturing, 11.8% for contracting, 11.9% for office & clerical, 7.7% for goods & services, and 5.8% for miscellaneous.
  • The 2018 Michigan workers’ compensation rates are available here. In 2018, the workers’ compensation rates fell an average of 7.5%. This represented a decrease of an average of 9.4% for manufacturing, 8.3% for contracting, 7.4% for office & clerical, 7.5% for goods & services, and 4.2% for miscellaneous.

FUTURE

  • The Compensation Advisory Organization of Michigan has determined there will be an average decrease of 6.9% in the workers’ compensation rates in 2021. This represents an average decrease of 6.5% for manufacturing, 10.6% for contracting, 7.6% for office & clerical, 6.0% for goods and services, and 5.5% for miscellaneous.
  • Michigan’s 2021 workers’ compensation rates are available here.

COMPARATIVE RATES

Montana Workers Compensation Rates

  • Almost every business with employees needs workers’ compensation insurance in Montana.
  • Montana’s worker compensation rates are based on the rates set by the NCCI. The rates in Montana were 19% higher than the rest of the country. This is despite a steady decline over the last five years.

CURRENT

  • It was announced in 2019, the workers’ compensation rates in Montana would decrease by an average of 8.6% in 2020. The rates are now 60% lower than the were in 2007.

HISTORIC

  • The 2019 average workers’ compensation rate in Montana was decreased by 10.1%.
  • In 2018, the average workers’ compensation rate in Montana was decreased by 9.7%.

FUTURE

  • Any proposed changes to the 2021 Montana workers’ compensation rates have not yet been released.

COMPARATIVE RATES

  • The average rate for clerical workers in Montana as at June 2020 was $0.37 per $100 of payroll, while the average rate for laborers was $22.84 per $100 of payroll.

New York Workers Compensation Rates

  • There are very few exceptions to the workers’ compensation insurance requirements in New York. Most businesses are required to carry this insurance.
  • New York is, on average, the forth most expensive state in the US for workers compensation rates. The rates are around 155% higher than the national median.
  • The New York Compensation Insurance Rating Board sets the workers’ compensation rates for the state of New York. “This base rate is multiplied by company payroll, and then Experience Modifier and other discounts may be applied by an insurance carrier to calculate the final premium. The rating bureau also sets Experience Modifier factors for employers with premiums above $5,000.”

CURRENT

  • Despite an extensive search of the New York Compensation Insurance Rating Board’s press releases and decisions, the only recorded change in workers’ compensation is for 2021 (changes are made from 1 October 2020).

HISTORIC

  • The workers’ compensation rates were revised in 2019, however, the average change was not made public. The 2019 revised rates are available here.
  • In 2018, New York workers’ compensation rates averaged between $3.00 and $3.49 per $100 of payroll.

FUTURE

  • The workers’ compensation rates in New York for 2021 have been decreased by an average of 1%.

COMPARATIVE RATES

  • The average rate for clerical workers in New York as at June 2020 was $0.07 per $100 of payroll, while the average rate for laborers was $29.93 per $100 of payroll.

New Hampshire Workers Compensation Rates

  • There are a few exceptions but almost all of New Hampshire businesses are required to have workers’ compensation insurance.
  • Despite workers’ compensation rates having risen 10% since 2014 in New Hampshire, the rates are on average 18% below the national average. The rates are largely dictated by the NCCI’s proposed loss cost, which the insurance industry uses as a basis for setting its workers compensation rates in New Hampshire.

CURRENT

  • In 2019, the New Hampshire Insurance Department approved the NCCI proposal to decrease the loss costs by 9.8% in 2020. This was the eighth consecutive year that workers’ compensation rates have fallen in New Hampshire.

HISTORIC

  • The proposed decrease of 14% to the loss costs was accepted by the New Hampshire Insurance Commissioner. This saw lower workers’ compensation rates come into effect on 1 January 2019.
  • In 2017, the NCCI proposed that the loss costs be reduced by 13.3%. The New Hampshire Insurance Commissioner accepted the proposal, and lower rates came into effect in 2018.
  • The loss costs was reduced 9% in 2017.

FUTURE

  • The low workers’ compensation rates will continue into 2021, with the New Hampshire Insurance Department approving the NCCI proposal to reduce the loss cost by an average 1.8%.

COMPARATIVE RATES

  • The average rate for clerical workers in New Hampshire as at June 2020 was $0.16 per $100 of payroll, while the average rate for laborers was $15.87 per $100 of payroll.

Pennsylvania Workers Compensation Rates

  • Although there are a couple of exceptions, most businesses in Pennsylvania with employees is required to have workers’ compensation insurance.
  • Pennsylvania does not base its workers’ compensation rates on the NCCI. The state overseas and sets the workers’ compensation rates. Insurance companies are not allowed to compete on rates. The workers’ compensation rates in Pennsylvania are approximately 108% of the national average.

CURRENT

  • Pennsylvania state does not publicly disclose the workers’ compensation rates. The information requires a login to access. Due to various discounts and benefits being applied to the rates of the insurance companies, the rates are not easily discernible from the premiums charged.

HISTORIC

COMPARATIVE RATES

  • The average rate for clerical workers in Pennsylvania as at June 2020 was $0.12 per $100 of payroll, while the average rate for laborers was $23.69 per $100 of payroll.

Arizona Workers Compensation Rates

  • The Industrial Commission of Arizona oversees workers’ compensation for the state and has done so since 1925. It is a requirement of Arizona state law that all businesses that employ workers carry workers’ compensation insurance to protect employees in the case of a workplace injury.
  • Workers’ compensation rates in Arizona are set by the NCCI. Insurance companies are able to file a deviation to the NCCI rate to cover the projected costs of losses in indemnity payments and expenses.

CURRENT

  • It is difficult to determine the average workers’ compensation rates in Arizona and the relative changes. Although the rates are set by the NCCI in Arizona, the majority of insurance companies file a deviation to the rates. This means that there is a significant variance in the workers’ compensation rates within each class.
  • A list of the highest and lowest workers’ compensation rates in Arizona for 2020 is available here.

HISTORIC

  • The historic workers’ compensation rates of the NCCI are not publicly available, requiring a login to access.

FUTURE

  • Workers’ compensation codes for 2021 from the NCCI are not publicly available, requiring a login to access.

COMPARATIVE RATES

  • The average rate for clerical workers in Arizona as at June 2020 was $0.20 per $100 of payroll, while the average rate for laborers was $20.61 per $100 of payroll.

Wyoming Worker’s Compensation Rates

  • All businesses employing staff are required to have workers’ compensation insurance in the state of Wyoming.
  • Wyoming is a monopolistic state, with the state fund being the only workers’ compensation provider. The rates reflect the NCCI workers’ compensation rates.

CURRENT

  • In 2020, the average workers’ compensation rate in Wyoming was $1.70 per $100 of payroll. The state legislature approved two credits of 8.33% (total 16.66%) to employers to use against their workers’ compensation obligations. The effect was similar to reducing workers’ compensation rates. The state has also said that COVID-19 illness will not be charged against an employers account.

HISTORIC

  • From 2003, Wyoming has used the workers’ compensation rates from the NCCI.
  • Unfortunately, Wyoming is not included in the majority of the insurance industry literature reporting the workers’ compensation rates because of the monopolistic nature of the industry. The NCCI workers’ compensation rate changes are not publicized. They require a login to access.

FUTURE

  • There have been no announcements from the state fund relating to the workers’ compensation rates in Wyoming for 2021.

COMPARATIVE RATES

  • The average rate for clerical workers in Wyoming as at June 2020 was $0.20 per $100 of payroll, while the average rate for laborers was $20.61 per $100 of payroll.

National Council on Compensation Insurance

  • The NCCI sets the compensation rates using the following formula:
  • The following graph illustrates the NCCI average workers’ compensation rate change between 2003 and 2019.
GLENN TREVOR
Glenn is the Lead Operations Research Analyst at The Digital Momentum with experience in research, statistical data analysis and interview techniques. A holder of degree in Economics. A true specialist in quantitative and qualitative research.

Why More Americans Are Leaving Cities for Suburban Areas

Previous article

Actionable Learning Resources that Outline the Process of Home Flipping in United States (Top Expert Recommendations)

Next article

You may also like

Comments

Leave a reply

Your email address will not be published.