Workers' Compensation Rates Likely To Keep Dropping In 2018

Indiana’s recommended rates for workers' compensation insurance will continue a multi-year decline in 2018. Officials say the nearly 13 percent drop in their benchmark rate for insurers is due to fewer workers’ comp claims and on-the-job injuries.

Indiana companies have to carry workers’ comp insurance to cover medical bills and lost wages for employees who get hurt on the job. But different jobs have different risks – you’re more likely to get hurt at a factory than behind a desk.

Insurers set their own premiums for those different jobs, and the nonprofit Indiana Compensation Ratings Bureau issues guidance each year on what employers should need to spend on workers’ comp, based on trends and projections.

This year, the bureau’s average recommended rate dropped about 9 percent. Next year, it’s recommending an average 12.8 percent drop. The state Department of Insurance says that should save Hoosier businesses more than $100 million.

Ratings Bureau president Ron Cooper says some jobs will still require more or less coverage. For example, auto repair shops this year pay an average of $2.10 for workers’ comp out of every $100 in payroll. Next year, Cooper says, they should pay an average of $1.77.

Altogether, he says these rate reductions are the largest he’s seen in his 22-year career – and there’s a reason for it:

“There are fewer workers being injured on the job than in years past,” he says.

Cooper says workplace safety advances and automation both play into that.

But the rate won’t keep dropping forever. Even if injury claims keep declining, he says the recommended rates will always rise and fall with medical costs, and legislative changes, like a recent increase in wage payouts for injured workers.