Employers to pay even less for workers' comp
By Greg Wiles
Advertiser Staff Writer
Hawai'i employers most likely will get another double-digit percentage cut in their workers' compensation premiums next year because of progress being made in workplace safety.
The National Council on Compensation Insurance has filed a request with the state Insurance Division for an 11.6 percent cut in "loss costs," the biggest expense used by insurers in setting premiums. Loss costs represent the amounts paid for claims by insurers.
Hawai'i's businesses, government and insurers have worked to lower rates here, which had been among the highest in the nation. But cuts in recent years have reduced Hawai'i's rates. Where it had the fourth-highest premiums in the nation in 2004, Hawai'i ranked 15th in 2006, according to a study by the Oregon Department of Consumer and Business Services.
Hawai'i's rate was 116 percent of the national median rate in the study.
Alaska had the highest rate at 201 percent of the median, while North Dakota was lowest at 44 percent.
Hawai'i State Insurance Commissioner J.P. Schmidt said the proposed reduction brings cuts amounting to 61.4 percentage points over a four-year period.
"This is one of the largest declines in workers' compensation insurance rates of any state in the nation," said Schmidt in a press statement.
"These lower rates show that the great efforts of Hawai'i's employers and our employers have been effective in providing a safer workplace for our workforce."
The pending cut in rates would make it six consecutive years of cuts. Last year the rate was reduced 19.3 percent.
Schmidt said more work needs to be done to lower costs, including work with the state Legislature to reduce the adversarial nature of the system. He said improving the quality of care to injured workers so they can return to their jobs faster would also reduce costs.
Other expenses used in computing premiums can include taxes, profits and administrative fees.
Reach Greg Wiles at gwiles@honoluluadvertiser.com.