DCBS News Release

September 16, 1999
For more information:
Mike Greenfield, 503-378-4100
Steve Corson, 503-947-7868


(Salem) State officials today announced that the workers' compensation "pure" premium rate - the average rate employers pay to their insurance company for workers' compensation coverage - will decline by 2.2 percent for calendar year 2000. This marks ten consecutive years of rate reductions in Oregon, totaling a 55.7 percent cut in workers' compensation insurance costs since 1990.

"Since workers' compensation reform began a decade ago, Oregon employers have saved nearly five billion dollars in reduced costs, workplace injuries are down, benefits to injured workers are up by well over 300 percent, and our reform model has been copied and praised across the nation," said Michael Greenfield, director of the Department of Consumer and Business Services.

"Clearly, the collaboration between management and labor that began with the goal of rescuing a workers' compensation system in imminent danger of collapse in 1990 has proven successful," Greenfield added. "However, the same kind of forward thinking labor and management brought to the table a decade ago is still needed today as we reflect on the reforms, a decade of court decisions, and subsequent legislation that has further shaped the Oregon workers' compensation system. We must reaffirm our commitment to a fair and balanced system that fosters safe workplaces, takes care of those who are injured, and contributes to a healthy business climate."

The pure premium rate is the basic premium reflecting the actual cost of workplace injury and illness claims, before insurer administrative expenses and profit are added into rates. Although the state sets the pure premium rate, premiums do not pay for state programs or services. The 2.2 percent reduction in the pure premium represents an average cut across all types of businesses. Rates for specific businesses and industry groups may be higher or lower depending on group and individual claim records.

The pure premium rate reduction translates to estimated savings of $14 million on employers' workers' compensation insurance bills for next year. Cumulative savings to employers, resulting from rate cuts since 1990, amount to approximately $4.8 billion. The premium reductions Oregon employers will experience during 2000 are equivalent to the cost of annual basic health insurance coverage for nearly 6,300 people.

Oregon's national ranking in workers' compensation costs moved from sixth most expensive in the nation in 1986 to 38th by 1998. At the same time, maximum benefits for permanently disabled workers in Oregon have been increased to a compensation level close to the national median.

Workplace injury and illness rates in Oregon have also declined by nearly 39 percent over the past decade. That includes all work-related injuries and illnesses recordable under OSHA standards, regardless of whether they later resulted in accepted claims for workers' compensation benefits. During the same period, the total number of employees subject to workers' compensation coverage has increased substantially.

The new pure premium rate will go into effect January 1, 2000. A notice describing the rate will be mailed this fall to employers who are required to carry workers' compensation insurance. Preparations are also underway to announce next year's rates for the workers' compensation premium assessment, which pays most of the cost of the state's workers' compensation and workplace safety programs, and for the Workers' Benefit Fund assessment, which pays for programs that provide direct benefits to injured workers and employers.

For more information on the Oregon Department of Consumer &Business Services, please contact: DCBS Director's Office, or call (503) 378-4100.

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