Aviation companies, oil field trucking firms and casinos are among the employers that could see nice-sized drops in their workers’ compensation rates in 2019.
Insurers have yet to come out with their own figures, but the Colorado Division of Insurance has approved a reduction of an average of 16.7 percent for the “loss costs” and the “rating values” components of workers’ compensation premiums for 2019.
Last fall, the division announced a 12.7 percent reduction for 2018. If the numbers hold – and there’s no reason to believe they shouldn’t – 2019 would mark the fifth consecutive year without an increase in rates.
It’s important to note that any given company’s rates can differ wildly depending on a number of factors, including number and severity of injury claims, not to mention the industry they’re in.
“Loss costs” are the average cost of lost wages and medical payments of workers injured during the course of their employment. “Rating values” are used to calculate a company’s “experience modification factor.” The lower a company’s e-mod, the better. Insurers use these costs to calculate their premiums, which, among other things, also are influenced by how well their investments perform on Wall Street.
Also read: Why Workers’ Comp Isn’t for Workers Only
According to figures from the National Council on Compensation Insurance, which provides the underlying base rates that help insurers set their own rates, the premiums in Colorado for flight crews working at aviation and helicopter operations could see a decline of more than 30%.
Trucking companies that employ drivers who service oil fields could see declines of better than 25%, while casinos could see rates drop by 20%. Childcare centers, meantime, could see declines of better than 18%.
Workers’ compensation insurance pays for lost wages, medical bills and the cost of rehabilitation for a worker injured on the job. It also provides death benefits and funeral expenses for the dependents of someone killed in a work-related accident or disaster.
Employers in Colorado must provide workers’ compensation coverage for their employees if one or more full or part-time persons are employed.
While rates might be dropping, companies will want to keep a close eye on their own e-mods. A few tips to help keep your workers’ compensation costs down:
Scott Kennedy, president and COO of CCIG, has more than 30 years of insurance and risk management experience.
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