DCBS News Release
September 29, 2000
For more information:
Dian Cox, 503-947-7897
Jan Miller, 503-947-7723
Oregon workers' compensation costs continue downward trend
(Salem) State officials today announced two rates and a recommendation for
a third that together will determine what Oregon employers pay for workers'
compensation insurance and to support workers' compensation and workplace safety
programs in calendar year 2001.
- The workers' compensation "pure" premium rate - the average rate
employers pay to their insurance company for workers' compensation coverage
- will decline by 3.7 percent for 2001. This marks eleven consecutive years
of rate reductions in Oregon, totaling a 57.3 percent cut in workers' compensation
insurance costs since 1990. 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 fund state programs or services. The 3.7 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 Workers' Benefit Fund assessment rate for 2001 will decline to 3.6 cents
for each hour or part of an hour worked by each paid employee covered by an
employer's workers' compensation policy. Formerly known as the "cents-per-hour"
assessment, the assessment supports certain direct benefits to injured workers.
Employers pay at least one-half the assessment, deduct no more than one-half
from their employees' wages, and submit the complete amount to the state on
a quarterly basis. This is a decrease from the 4.0 cent rate assessed in 2000.
- State analysts have recommended that the workers' compensation premium assessment
rate remain unchanged for 2001 at 7.3 percent. Employers pay the assessment
based on the total premium charged to them by their insurer. The premium assessment
is dedicated to the state's administration of the workers' compensation system,
plus workplace safety and health programs. Insurers collect the assessment
and then transfer it to the state. The Department of Consumer & Business
Services will hold a hearing to invite public comment on the recommendation
on October 4 at 3:00 p.m. in basement conference room "B" of the
Labor and Industries Building, 350 Winter Street NE in Salem. The department's
director will consider any comments submitted before making a final rate decision.
The pure premium rate reduction translates to estimated savings of $22 million
on employers' workers' compensation insurance bills for the year. Cumulative
savings to employers, resulting from rate cuts since 1990, amount to approximately
The premium reductions Oregon employers will experience during 2001 are equivalent
to the cost of basic annual health insurance coverage for nearly 8,296 people.
Oregon's national ranking in workers' compensation costs moved from sixth most
expensive in the nation in 1986 to an estimated 34th by 2000. 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 declined by nearly 36 percent
in the private sector and 33.7 percent in the public sector since 1988. 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 rates - for pure premiums, the Workers' Benefit Fund assessment, and
the premium assessment - will go into effect January 1, 2001. A notice describing
the rates will be mailed before the end of October to employers who are required
to carry workers' compensation insurance.