Colorado employers soon will face an increase in workers’ compensation insurance premiums.
Most employers will pay slightly higher premiums in 2011 as a result of a 3.4 percent increase in what’s known as loss costs — the average cost of lost wages and medical payments to workers injured on the job. Loss costs are one factor used in establishing premiums for each employer.
“Although the frequency of claims went down, the cost of claims were up significantly. Part of the regulator’s job is to be sure the premiums charged will be adequate to cover claims, so we are ordering the increase this year,” said Marcy Morrison, state commissioner of insurance.
Colorado has not increased worker’s compensation loss costs in more than a decade. Loss costs decreased 7.5 percent in 2007, 16 percent in 2009 and 9.7 percent in 2010.
The National Council on Compensation Insurance determines loss costs based on the the number and length of workers’ compensation insurance claims, the severity of work-related injuries and medical costs. Insurers add their own expenses to arrive at the rates they charge employers.