A biennial nationwide ranking of workers’ compensation premiums was released by the Oregon Department of Consumer and Business Services this month. The 2014 Oregon Workers’ Compensation Premium Rate Ranking Summary shows that, while Maine remains one of the states with the highest premiums in the nation, Maine premiums continue to fall.
The summary’s “index rating” reflects the cost of workers’ compensation premiums per $100 of payroll. Together, the last several ranking summaries reveal that between January 1, 2008 and April 1, 2014, Maine’s premiums have fallen from 5th highest in the nation at $3.04 per $100 payroll, to 13th at $2.15 per $100 payroll – a 29% reduction in premiums.
What factors are driving such a consistent decline in premium costs? According to the 2014 Annual Report on the Status of the State of Maine Workers’ Compensation System, a number of changes may drive the trend. For instance, Maine is one of the states with the largest decrease in benefit costs, and Maine is approaching the national average for indemnity benefits and medical benefits. This decrease in benefits paid may be accounted for in part by several factors including: the adoption and continued revision of a new medical fee schedule in 2011 that aims to minimize medical costs; changes to the Board’s structure; and a significant amendment to the Act in 2013 addressing – among other things – entitlement to partial incapacity benefits.
Whatever the cause for the continued gradual decrease in Maine workers’ compensation premiums, the trend is cause for Maine employers to celebrate. The state has a long way to go before it approaches the national average, but if the Board and legislature continue to address cost drivers, we are hopeful the trend will continue.