Rate Reduction for Insurers Providing Workers’ Comp Coverage Shows Raimondo’s Commitment to Easing the Cost of Doing Business in Rhode Island
July 12, 2017
The Department of Labor and Training (DLT) announced today that it has cut the administrative assessment rate charged to insurance companies providing workers’ compensation coverage in Rhode Island. For fiscal year 2018, DLT has reduced the rate to 5.75 percent from 6.25 percent of carriers’ total net workers’ comp premiums.
This is the fourth rate reduction since 2013. Based on the net premiums collected in FY 2016, a rate drop of one-half of a percentage point will save insurers about $1,440,000 from July 1, 2017, to June 30, 2018, according to DLT actuarial data.
State law gives the DLT Director the power and discretion to set workers’ compensation assessment rates annually according to the fiscal year calendar. By law, DLT finances the entire workers’ comp system using the “net assessable premium” formula. Workers’ comp is a form of no-fault insurance designed to help employees injured at work pay for medical expenses and make up lost wages.
DLT Director Scott Jensen made the decision after examining end-of-year financial records for his Workers’ Compensation Division and projecting how much money it would need to cover its costs over the next fiscal year.
“Because of the improving economy and the effective administration of the workers’ compensation system, we are able to pass along savings to the insurers who provide this very important coverage, which protects workers and companies equally,” Jensen said. “One of the highest priorities for the Raimondo administration is to make it easier to do business in the state and this is just one way we can make that happen.”
Workers’ comp premiums are based on a company’s payroll. With the growth of the economy and more Rhode Islanders working, the premium base has grown over the past year, facilitating the rate reduction. DLT finances the workers’ comp system, but by law, three different agencies handle aspects of workers’ compensation in Rhode Island:
ABOUT DLT: The RI Department of Labor and Training offers employment services, educational services and economic opportunities to both individuals and employers. DLT protects Rhode Island’s workforce by enforcing labor laws, prevailing wage rates and workplace health and safety standards. The department also provides temporary income support to unemployed and temporarily disabled workers. For more information, please call the RI Department of Labor and Training at (401) 462-8000 or visit the website at www.dlt.ri.gov.