AUGUSTA, Maine — Employers in Maine are expected to save $15.2 million on workers’ compensation insurance this coming year, thanks in part to a reduction in on-the-job injuries and the ability of the state workers’ comp board to control medical costs.

The Maine Bureau of Insurance on Thursday received a recommendation to decrease workers’ compensation rates by an average 7.7 percent, according to the report, which was obtained by the Bangor Daily News.

Eric Cioppa, superintendent of the Maine Bureau of Insurance, called the proposed decrease “very good news.”

“Most states, it’s my understanding, are not seeing decreases,” he said.

The recommendation comes from the National Council on Compensation Insurance, which is a rating advisory organization that tracks and analyzes workers’ comp insurance rates for several states, including Maine.

The rate reduction would save Maine employers who buy workers’ comp insurance on the commercial market a total of $15.2 million, according to calculations performed by the Maine Bureau of Insurance. Large employers that are self-insured, such as Eastern Maine Medical Center and Bath Iron Works, would not be affected by this rate decrease.

An average decrease of 7.7 percent would be the biggest decrease in workers’ comp rates the state has experienced since 1998, according to Paul Sighinolfi, executive director of the Maine Workers Compensation Board. Overall, workers’ comp rates have experienced a cumulative decrease of 52.7 percent since workers’ compensation reform was passed in 1992, according to the insurance bureau.

Last year, the insurance bureau approved a 3.9 percent workers’ comp rate increase, which was blamed mainly on rising health care costs.

However, Sighinolfi said there isn’t one factor that causes rates to increase or decrease.

“It’s multifactoral,” he said.

This newly proposed decrease derives from several factors: the frequency of on-the-job injuries, the severity of those injuries and the amount of time injured employees are out of work are all on a downward trend.

In addition, while health care costs may be on an upward trend, the Maine Workers’ Compensation Board has succeeded in controlling medical costs through a medical fee schedule, which determines how much health care providers receive for their services. The board approved its most recent fee schedule in December.

“Those four factors are weighing in on our 7.7 percent decline,” he said. “Everybody should take credit for that. It’s not just the insurance community. The employers and employee community should take credit for that. Safety is a big issue and people are taking it seriously.”

Sighinolfi does call out one insurer that does deserve recognition. The Maine Employers’ Mutual Insurance Co., commonly referred to as MEMIC, controls 62.3 percent of the commercial market in Maine. That’s more than 18,000 policyholders.

“They played an important role in this reduction because they take handling their claims seriously, and they’re very good about getting people back to work,” Sighinolfi said.

John Leonard, MEMIC’s CEO, said on Thursday that he was “elated” by the news of the proposed rate decrease.

Given the company’s share of the market, Leonard said the company takes pride in the reduction of workers’ comp rates Maine has seen since 1992.

“There is joy and jubilation in this building today,” Leonard said. “We feel great knowing we have made contributions to a workers’ comp system that is major cost driver for people trying to do business in Maine. Any time we can contribute to bringing down rates, that’s a good day at MEMIC.”

Leonard pointed out that the industries having the biggest impact on the overall average rate decrease were manufacturing and contracting, which tend to have the highest proportion of on-the-job injuries and the most severe. Under the current proposal, the average manufacturer would see a 7.9 percent reduction in rates, while, on average, contractors are facing a 9.2 percent reduction.

Maine stands out among states for its falling workers’ compensation premiums, Sighinolfi said. For example, employers in Delaware are expected to see a 41 percent increase in their rates this year, he said.

“Other than our sister state of New Hampshire, there will be increases in the rest of the Northeast,” Sighinolfi said.

The Maine Bureau of Insurance still needs to review and analyze the NCCI report before officially approving the decrease, but Sighinolfi said the chance this proposed rate reduction isn’t approved “is slim to zero.”

The proposed rate decrease is expected to go into effect on April 1.

Whit Richardson

Whit Richardson is Business Editor at the Bangor Daily News. He blogs about Maine business, entrepreneurs and the economy.