Colorado employers can expect a reduction in a component of the workers’ compensation insurance premiums they’ll pay in 2018.
The Colorado Division of Insurance approved a 12.7 percent decrease in the average loss costs component of premiums. The cut follows a 2.4 percent decrease for 2017.
“This is good news for employers in Colorado,” said Marguerite Salazar, the state insurance commissioner. “But this is also good news for employees. It means that workplace accidents are going down, and when they occur, they are less serious and mean less time off work.”
Loss costs represent the average cost of lost wages and medical payments of workers injured during employment.
A number of factors affect workers’ compensation insurance costs, including the number and duration of claims, severity of injuries, number of required treatments, health care costs and overall costs to cover workers’ compensation claims.
This decrease is attributed to a number of factors, including what’s paid out in claims. There’s been a reduction in the number of claims filed — from 25 claims per million in 2001 to 17.8 claims per million in 2015.
In addition, more employers provide ongoing safety training. Many employers also provide programs to bring employees back to work sooner and promote a healthier work force.
Even with the reduction in the average loss cost component, individual employers could see increases or decreases in their overall workers’ compensation insurance premiums based on their classification codes or industry groups.
The National Council on Compensation Insurance, a rating and advisory organization, collects information each year on workers’ compensation claims for the insurance industry and publishes loss costs that form the basis for premium determinations.
Colorado insurers use the NCCI loss cost as a base. Each insurer then adds its own expenses to the loss cost to determine overall rates charged to employers.