Workers' Compensation Focus, WINTER 1998
(Focus is published by the Oregon Department of Consumer Business Services, Workers' Compensation Division)
Oregon employers -- eighth straight year of workers' compensation premium reductions
by Steve Corson
In September, Governor John Kitzhaber announced an average reduction of 15.6 percent in the pure premium rate Oregon employers will pay for workers' compensation insurance in 1998. This translates to savings of more than $112 million on employers' workers' compensation bills for the year. The announcement marked a record eight consecutive years of rate reductions in Oregon, totaling a 52.4 percent cut in workers' compensation insurance costs since 1990. No other state has equaled this success.
"Oregon has worked hard to improve workplace safety while at the same time cutting the cost of doing business," Governor Kitzhaber said. "I believe these goals are mutually supportive -- not exclusive -- and I'm very pleased that our state's employers, workers, and government have worked together so successfully to achieve them within a better, more effective workers' compensation system."
The primary factor in these reductions has been a dramatic drop in work-related illnesses and injuries, which have set record low rates in recent years. Oregon's national ranking in workers' compensation costs improved from sixth most expensive in the nation in 1986 to 34th by 1996.
"Other states recognize Oregon as a leader in developing a successful, responsible workers' compensation system," Governor Kitzhaber said. "Regulatory reform and a strong occupational safety and health program have helped cut our insurance costs while reducing the number of workers hurt or even killed on the job. At the same time, we've been able to increase maximum benefits for workers who are injured."
Governor Kitzhaber added, "This kind of success doesn't come from playing politics or trying to evade responsibility. It comes from putting differences aside and working together for the common good. Oregon employers, workers, insurers, and state government have done this to create a workers' compensation system we can all rely on."
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 the rates. The 15.6 percent reduction in the pure premium represents an average cut across all types of businesses. Rates for specific business and industry groups may be higher or lower, depending on group and individual claim records.
Steve is the executive assistant to the director for public services and information of the Department of Consumer & Business Services. He can be reached by phone, (503) 947-7868, or e-mail: Steven.J.Corson@state.or.us
The new premium rate will go into effect January 1, 1998
Average reduction by industry group
While the overall average reduction is 15.6 percent, the rate for individual industry groups may be higher or lower, depending on the experience rating for each group.
Manufacturing -14.7 percent
Contracting (construction) -11.7 percent
Office and clerical -18.3 percent
Goods and services -18.1 percent
Miscellaneous * -15.2 percent
*Includes logging, mining, trucking, utility companies state agencies
1998 savings: $112 million as policies renew.
Eight years of consecutive reductions amounting to -52.4 percent.
Employees affected (1997): 1.54 million.
Employers affected: 78,103
1990 $825 million (historic high)
1991 $796 million
1992 $802 million
1993 $737 million
1994 $722 million
1995 $737 million
1996 $727 million
1997 $716 million (estimated)