Louisiana businesses should see their worker’s compensation rates drop in 2016 by about 2.7 percent, which would save employers roughly $23.5 million in premiums, according to the state Department of Insurance.
The Insurance Department is reviewing a filing by the National Council on Compensation Insurance, a national organization that analyzes worker’s compensation data and recommends rates. Most of the insurers offering worker’s compensation in Louisiana use the NCCI filing to formulate rates.
Worker’s compensation is a form of insurance that provides for lost wages and medical benefits to employees injured on the job.
“In 2007, there were 197 companies writing worker’s comp. By the end of 2014, we had 235 companies writing here — an increase of 19 percent,” Insurance Commissioner Jim Donelon said. “That competition is also bringing costs down, with companies today paying nearly 40 percent less for the same coverage as they were 10 years ago.”
In seven of the last 10 years, NCCI has filed for worker’s compensation rate reductions in Louisiana, state Insurance Department records show. Altogether, the filings would have reduced rates by close to 38 percent.
Nationwide, worker’s compensation rates are the lowest they have been in 25 years, despite the dramatic increase in health care costs, according to an analysis by Pro Publica, a nonprofit investigative journalism group. In 2014, Louisiana employers paid $2.23 for every $100 in wages. In 1988, employers were paying $3.77 per every $100 in wages.
Michael DePaul, chief operating officer for Luba Workers’ Comp, said insurers’ and employers’ efforts to educate employees and reduce workplace injuries are working.
“I think there’s just more general awareness of the workforce. ... I think things are improving even at the smaller business level, and therefore, the net result is usually fewer claims,” DePaul said.
Louisiana workplaces ranked second-safest in the nation in the most recent survey data available, behind only Washington, D.C., for the rate of nonfatal injuries and illnesses, according to the Louisiana Workforce Commission.
LWC Executive Director Curt Eysink said medical treatment guidelines the agency implemented in 2011 also have played a role in reducing rates.
The guidelines have cut the number of worker’s compensation lawsuits by a third, Eysink said.
However, the guidelines are being challenged in the court system by a group of attorneys and doctors.