A new report from Oregon says Alaska’s workers’ compensation premium rate is dropping.
The Oregon Workers’ Compensation Premium Rate Ranking Summary is based on methods that put states’ workers’ compensation rates on a comparable basis. The study uses classification codes from the National Council on Compensation Insurance. The report shows Alaska was leading in the nation in workers’ compensation premiums but now the state’s premium is getting better.
Research analyst with the Oregon Department of Consumer and Business Services Jay Dotter says the report starts with a survey sent out to every state.
“What we’re trying to do is come up with a comparison of workers’ comp costs between states. It’s going to include what we call the lost costs, which are the part of the premium that goes for paying claims now and future. The other part is everything else that goes into it, the assessments, what the insurer needs to charge to make money on it, and we’re trying to come up with this equivalent index rate that compares all the states together.”
The report is conducted once every two years. However, the report is specifically designed to help Oregon compare itself to other states. There are some states, like Alaska, that lump all trucking together into one category but there are several different kinds in Oregon. The analysts simply make basic categories that are similar among all 50 states and the District of Columbia.
Dotter says the main reasons he sees Alaska’s premium going down has to do with the lowering cost of medical care and less number of claims.
“Make the work place safer, and you have fewer claims and that helps keep the cost down.”
Alaska employers paid about $300 million in workers’ compensation insurance premiums in 2013. Those lower premiums saved Alaska businesses about $6 million in 2014. Director of the Alaska Division of Workers Compensation Michael Monagle says although it’s definitely worth noting Alaska’s new rating, it’s not because of any policy change.
“And we had, again, over a four year period about a four percent decrease in overall costs. For us, for Alaskans, those declines are primarily because of frequency that is the number of injuries that happen each year. If you look back, about 20 years ago Alaska had about 30,000 reported injuries per year. This last year for which we have data for calendar year 2013, that’s dropped down to about 19,000 reported injuries.”
Alaska ranks fifth behind California, Connecticut, New Jersey and New York. Monagle says he noticed the other states that were in the top ten with Alaska.
“Of the top ten states, five of them are located in the northeast where if you look at some of the data the costs for medical treatment in the northeast states is very high like it is in Alaska.”
In 2002, Alaska ranked 15th but by 2006 Alaska was up to first in premiums.