Colorado employers can expect an average reduction of 1.9 percent in the so-called “lost cost” component of workers’ compensation insurance premiums they’ll pay in 2016.
The reduction follows no change in the lost cost component for premiums for 2015.
For 2016, employers still could see increases or decreases in their overall workers’ compensation insurance premiums based on their classification codes or industry groups.
“As with last year, this positive development comes from the work by employers and employees to better manage workers’ compensation costs,” said Marguerite Salazar, Colorado commissioner of insurance.
The Colorado Division of Insurance, a part of the Department of Regulatory Agencies, approved the decrease in the average loss cost component
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 the overall costs to cover workers’ compensation claims,
The National Council on Compensation Insurance, a rating and advisory organization, collects annual data on workers’ compensation claims for the insurance industry and publishes loss costs that form the basis for all workers’ compensation premium determinations.
All insurers in Colorado use the NCCI loss cost as a base. Each insurer then adds its own expenses to the loss cost to determine the overall rates charged to employers.