Maine's rate for workers’ comp premiums is 10th highest in the U.S.

A report that ranks Workers’ Compensation premium rates shows that Maine has the 10^th highest workers’ comp rate in the nation.

Compiled by the State of Oregon’s Department of Consumer and Business Services, the premium rate indices were calculated based on data from 51 jurisdictions, for rates in effect as of Jan. 1, 2012.

Ranked at the eighth highest in 2010, Maine’s rank in 2012 dropped slightly to tenth highest in the nation. That still put Maine’s workers’ comp premium rate higher than 40 states and the District of Columbia. Ranked at 48^th, the District of Columbia’s rate of $1.28 is almost the lowest in the nation, coming in at 68% of the median rate.

Maine’s premium rate index for 2012 is $2.24, which is 119% of the median rate of $1.88 for the 51 states and D.C. That means that Maine’s employers pay a rate of $2.24 per $100 of payroll for their workers’ comp premium.

Labor unions fight to maintain Maine’s generous workers’ compensation system, which has guaranteed large settlements even for injuries that cause only partial incapacity. Legislation approved this year may help rates drop a little, but Maine will continue to have much higher than average rates. LD 1913, “An Act to Review and Restructure the Workers’ Compensation System,” was  was signed into law April by Governor LePage.

National premium rate indices range from a low of $1.01 in North Dakota to a high of $3.01 in Alaska. The 2012 median value is $1.88, which is a drop of 8 percent from the $2.04 median in the 2010 study.

Of the New England states, Connecticut ranks highest—and almost highest in the nation. Connecticut’s rate of $2.99, which is 159% of the median, puts it at the second highest in the nation.

New Hampshire ranks just above Maine with the nation’s ninth-highest rate of $2.40, which is 128% of the median rate.

With the 14^th highest-in-the-nation rate, Vermont’s rate is $2.07, which is 110% of the median.

Rhode Island is in 20^th place with a rate of $1.99, which is 106% of the median.

Ranked at 44^th, Massachusetts has one of the nation’s lowest workers comp premium rates, $1.37, which is 73% of the median.

One jurisdiction has an index rate in the $3.00-$3.49 range; seven are in the $2.50-$2.99 range; 11—including Maine—are in the $2.00-$2.49 range; 22 are in the $1.50-$1.99 range; and 10 have indices under $1.50.

Oregon, the state the commissioned the study, previously had one of the highest rates in the nation for workers’ comp premiums. It now has a rate of $1.52—the 13th lowest rate in the nation.

Only 11 states and the District of Columbia had average rates lower than Oregon at the beginning of 2012, according to the preliminary analysis of a DCBS study. Of neighboring states, Washington and Idaho had higher rates, and California’s average rates were more than 50 percent higher. Only Nevada had a lower rate.

“Oregon has minimized rate increases by improving workplace safety, getting injured workers back to work quickly and controlling medical payments for certain procedures,” said Patrick Allen, director of Oregon’s Department of Consumer and Business Services. “For years, in fact, those improvements masked the growth in medical costs.”

From 2003-2010, wages in Oregon increased 20 percent while medical claim costs went up 31 percent, according to National Council on Compensation Insurance data.

One way Oregon’s Workers’ Compensation Division has attempted to control medical costs is by establishing fee schedules that limit how much can be paid for certain medical services and equipment and to ambulatory surgical centers.

In addition to any change in pure premium, other workers’ compensation costs reviewed annually by the department include:

• An assessment on workers’ compensation premiums that pay for the state costs of running the program. Oregon’s rate will remain the same in 2013 as in 2012 (6.2 percent for insurers; 6.4 percent for self-insured employers and self-insured employer groups).

• An assessment for programs that increase benefits over time for workers who are permanently and totally disabled and for families of workers who die as the result of workplace injury or disease. The assessment also funds return-to-work programs. Oregon’s hourly rate for this program is going up a half cent in April 2013 to 3.3 cents so the department maintains a required fund balance that covers approximately 12 months worth of costs.

“You’re beginning to see rankings tighten as states adopt the types of reforms that Oregon pioneered years ago,” DCBS Director Patrick Allen said.

In 1986, Oregon ranked sixth highest in the nation in the average workers’ compensation premium rates paid by employers. It also had one of the nation’s highest occupational injury and illness incidence rates.

To improve the system, the 1987 Legislature enacted a bill that expanded the requirements for safety and health loss-prevention programs, increased penalties against employers who violate the state’s safety and health act, created the Preferred Worker Program while limiting other vocational assistance, increased benefits, limited the authority of the Workers’ Compensation Board, and created the office of the Ombudsman for Injured Workers.

Another bill limited mental stress claims and placed on the worker the burden of proving that a claim is compensable.

In 1990, Oregon’s Legislature passed expanded requirements for safety committees, required that the department’s disability standards be used at claim closure, required that the department create a workers’ compensation claims examiner program, limited attending physicians and palliative care, allowed the use of  managed care organizations, modified the Preferred Worker Program, increased benefits, created claim disposition agreements, expanded the department’s dispute resolution processes, increased Oregon OSHA staffing, created the Ombudsman for Small Business, and established the Management-Labor Advisory Committee.

For more about Oregon’s workers’ compensation program, see http://www.cbs.state.or.us/external/imd/rasums/2362/11web/11_2362.pdf.