The decline mirrors a national drop in workers comp, but Oregon’s low-cost rival states with less robust protection.
Oregon employers will on average, pay $0.90 per $100 of payroll for workers’ compensation costs in 2024, down from $0.93 in 2023, according to information released this week by the Oregon Department of Consumer and Business Services. That figure covers workers’ compensation claims costs, assessments, and insurer profit and expenses.
The pure premium rate – the base rate insurers use to determine how much employers must pay for medical costs and lost wages — will also drop by an average 6.7% in 2024, under a DCBS proposal. The decline in costs marks 11 years of average decreases in the pure premium rate, and means Oregon has the 10th-lowest premiums in the country, according to DCBS data.
The decrease in workers’ compensation rates follows a larger trend throughout the country. A 2015 review by Pro Publica found employers were paying the lowest rates for workers’ compensation insurance than at any time in the last 25 years, despite increasing costs of health care.
A 2022 report by the National Academy of Social Insurance showed a 21% national decline in workers compensation claims between 2016 and 2020, with average cost for employers declining from $1.32 in 2016 to $1.04 in 2020. Oregon’s cost of insurance remained below the national average, dropping from $1.13 to $0.89 during the same period.
From 2016–2020, the total benefits paid to injured workers decreased in 40 states. The U.S. Department of Labor attributed the drop to COVID-19, as well as decades-long trends including changes to state workers’ compensation laws and policies across the county – including states like South Dakota, Texas and Wyoming which have made workers’ compensation optional for certain occupations.
In Oregon, workers’ compensation insurance is required for most businesses with employees, and applies even if employees are part-time. Oregon workers’ compensation ensures coverage of medical expenses for workplace injuries and occupational diseases and provides temporary disability benefits while workers are recovering, typically two-thirds of the worker’s average weekly wage.
Workers in Oregon also have access to the Workers’ Benefit Fund assessment and return-to-work programs, which provide increased benefits over time for workers who are permanently and totally disabled, and gives benefits to families of workers who die from workplace injuries or diseases.
DCBS attributed Oregon’s continuing low cost of workers comp to employers to the success and stability of Oregon’s workers’ compensation system, and its programs to control costs, maintain benefits, monitor employers, resolve disputes, and improve workplace safety and health.
“Oregon OSHA also offers employers multiple free resources, including consultation services – no fault, no citations, no penalties – to help them with their on-the-job safety and health programs, including in the construction industry,” Mark Peterson, public information and communications director at DCBS told Oregon Business over email. “Oregon OSHA has been helping drive down incident rates for decades. This has not only helped keep workers safe, but has also contributed to decreases in workers’ compensation costs. From 1990 through 2021, for example, injury and illness rates dropped by more than 60 percent, and fatality rates fell by more than 50 percent.”
The decrease in the pure premium will be effective Jan. 1, 2024, but employers will see the changes when they renew their policies in 2024.