Worker injuries down, as is cost for worker's comp

AUGUSTA, Maine — State insurance regulators have approved a filing by the National Council on Compensation Insurance that will result in most employers in Maine seeing a decrease in their workers’ compensation insurance rates in 2009, with business groups saying that is good news as employers deal with the recession.

“Our finding was that the frequency of claims is down and when there are fewer accidents the costs go down,” said Laura Backus-Hall, the regional representative for NCCI. “I think it is clear that there has been a good job in prevention of workplace injuries in Maine.”

The filing approved by the State Insurance Superintendent will reduce rates overall by 7.6 percent with the dollar value to employers, based on the premiums paid in 2007, totaling about $18.3 million. The NCCI filing covers most insurers.

Backus-Hall said while the frequency of claims is the major factor in the filing, other factors like a slower increase in the cost of medical care provided under workers’ comp insurance also contributed to the decrease in rates.

She said Maine is following a national trend of fewer workplace injuries and she singled out the Maine Employers Mutual Insurance Co., usually called MEMIC, as doing an exceptional job of providing workplace safety programs.

The company announced in October it was returning $15 million in dividends to its policyholders. The company has about two-thirds of the workers’ compensation insurance market in the state.

MEMIC President and CEO John Leonard said more than 20,000 Maine employers who were policyholders of the company during 2005 will get payments. That will bring the total dividends paid to policyholders to more than $100 million since 1998.

David Clough, state director of the National Federation of Independent Businesses said the two actions together are certainly good news for many employers at a time of increased operating costs.

“It means they have more money with which to pay bills and salaries and keep people employed,” he said. “That is good news.”

Clough said the rate decrease will have a significant impact on the employers across the state that have been hit by double-digit increases in electricity costs and significant growth in health insurance premiums.

“It particularly benefits industries that pay a lot because of the nature of their jobs, and that does not vary by size, it varies by the type of business,” he said.

Peter Gore of the Maine State Chamber of Commerce said the filing is one more indication that the reform of the workers’ comp laws passed in 1992 after a bitter legislative battle are working.

“The reforms that were instituted by Governor [John] McKernan and the Legislature have continued to serve both employers and employees well,” he said. “Our costs have moved from the highest in the nation to somewhere in the middle — and we have reduced workplace injuries, and that benefits everyone.”

Gore said while the monetary savings are important for employers, the message the filing sends to Maine businesses and those companies considering expanding to the state is important.

“It is events like this that help Maine stay competitive,” he said.

Gore said while he believes most employers will receive a reduction in their workers’ comp insurance costs, not all will.

“I want to caution that not all employers will see a decrease,” he said. “Some may see an increase based on the number of claims or because of the type of business they are.”

Backus-Hall said the rate filing for Maine is the second-greatest reduction in rates in New England this year proposed by NCCI. She said in recent years Maine employers have seen small increases, or small decreases in the group’s rate filing.