Connecticut workers comp costs to drop in 2020
The cost of workers compensation insurance will drop a sixth consecutive year in Connecticut, with the state’s insurance department attributing the decline to fewer workplace injuries and a resulting lower frequency of claims.
Under Connecticut law, employers are required to provide workers compensation insurance for their workers as well as any subcontractors lacking coverage. Workers can file claims covering both medical expenses for workplace injuries as well as a portion of their wages until they can get back on the job.
Connecticut averages about $32,000 in costs for wage replacement with wage replacement, accounting for a higher percentage of Connecticut claims versus medical costs of nearly $27,000. That is opposite to national trends, with medical costs accounting for 58 cents of every dollar paid out by workers comp carriers.
For workplaces that have higher odds of workplace injuries such that employers have difficulty getting coverage in the regular market, Connecticut and other mandates an “assigned risk” pool to offer insurance, with about one in every 20 companies in Connecticut securing coverage via that avenue. Vehicular accidents are the leading cause of claims running into the millions of dollars in reimbursement — with frequency increasing in part due to texting while driving — followed by falls and workers being struck by objects while on the job.
Under the Connecticut Insurance Department’s approval of rates proposed jointly by carriers through the National Council on Compensation Insurance, underwriters will charge 2.9 percent less on average for the portion of premiums that cover claims payouts, with the assigned risk pool seeing a 4.5 percent decline. The changes take effect in January.
Workers compensation premiums have dropped nationally in the past year, with Connecticut employers to see the fourth smallest decrease after Hawaii, West Virginia and Missouri. Montana is seeing the largest average decline at 17.2 percent according to NCCI, with Vermont among the top five nationally for yearoveryear savings with an 11.6 percent drop, and New York not far behind at 10 percent.
Connecticut employers saved $49 million last year on premiums they paid for coverage, according to NCCI, with carriers collecting $769 million in premiums for a 6 percent decline.
Building contractors will see the biggest reduction in the losscost portion of rates at 5.9 percent on average for standard policies, and 7.5 percent for employers that secure coverage in the assigned risk pool.
Rates will decline by the slimmest margin for manufacturers, at 1.5 percent and 3.2 percent in the assigned risk pool. Coverage for office settings will drop 2.5 percent on average, and retail operations will fall 1.9 percent.