For the first time in five years, Colorado employees will avoid an increase in the so-called “loss costs” component of their workers’ compensation insurance premiums.
“These results come down to the efforts made by employers and employees to control workers’ compensation costs,” said Marguerite Salazar, state insurance commissioner. “Getting injured workers back to work sooner, meaning that claims are closed faster, helped offset a small increase in claim costs, resulting in no change to loss costs.”
The Colorado Division of Insurance announced the loss costs component of premiums will remain unchanged in 2015. Employers still could experience increases — or decreases — in their overall premiums based on their particular classification codes or industry groups.
Loss costs take into account the average cost of lost wages and medical payments of workers injured on the job. Loss costs are one factor used in establishing workers’ compensation insurance premiums for each employer.
The National Council on Compensation Insurance determines loss costs based on annual data on workers’ compensation claims. Colorado insurers use NCCI loss costs as a base and then add their own expenses to determine the rates they charge employers.
Loss costs had increased in Colorado every year since 2010. Before that, loss costs had not increased in more than a decade.