Workers’ Compensation Assessment to Drop
Most Employers Will Save Money

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July 15, 2004

PROVIDENCE – Governor Donald L. Carcieri has announced a significant decrease in the rate insurance carriers and employers will contribute to support Rhode Island’s workers’ compensation (WC) system. Effective July 15, 2004, the Workers’ Compensation Administrative Fund will reduce its assessment on the premiums insurers charge from six and three quarter percent to six percent, a reduction of $2.3 million. This change will affect workers’ compensation insurance policies written in 2003. The assessment decrease should lower the cost of most employers’ insurance and may help reduce the cost of doing business. Assessment funds support the WC system including the Rhode Island Workers’ Compensation Court and the Workers’ Compensation Division of the Department of Labor and Training. Services include rehabilitative programs for injured workers, investigation of fraud and employer compliance, education on the WC system, and data collection.

The WC Administrative Fund was created to fairly distribute the cost of the workers’ compensation system across the parties that use it, rather than burdening the general taxpaying population. The Director of the Department of Labor and Training is required to evaluate the cost of the WC system, then levy a charge against insurers to cover fund expenses.

Adelita S. Orefice, the Director of the Department of Labor and Training, attributed the dramatic reduction to several factors, including the Department’s aggressive investigation and enforcement actions taken against employers who fail to maintain workers’ compensation insurance. This boost in revenue, coupled with increases in total employment wages and improved administrative efficiency at both the Department and the Workers’ Compensation Court, caused revenue to exceed expense and created the opportunity for the three quarter percent reduction.

Judge George E. Healy, Chief Judge of the Workers’ Compensation Court, complimented the Department on its efficient management of the fund. “The Court has been diligent in monitoring and controlling expenses because we realize that any inefficiency in management results in higher expenses for Rhode Island’s employers. I am pleased that Director Orefice shares this philosophy and that the Department has succeeded in reducing the employers’ costs. Today’s announcement will have an extremely positive impact on the state’s economic outlook.”

Workers’ Compensation is a no-fault system that requires employers to maintain insurance coverage to protect their employees from loss of earnings and/or medical expenses for any work-related illness or injury. The Workers’ Compensation Administrative Assessment is collected annually. For more information, visit www.dlt.ri.gov/wc.

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