A decrease in a portion of the insurance pricing formula means a majority of Vermont’s small businesses will see their workers’ comp premiums go down significantly, according to the department.
The portion of premium prices going down is called “loss costs,” which measure a company’s past and present risks of workers getting injured. Those “loss costs” are down 7.9 percent for the majority of Vermont employers, the department says, and loss costs are down 8 percent for a smaller group.
The savings will be higher in two Vermont industries, according to the department. Ski areas will see the loss costs behind their workers’ compensation premiums go down 12.3 percent, and there is a 10 percent decrease for dairy farm operators.
Michael Pieciak, the commissioner of the Department of Financial Regulation, said the insurance premiums will drop because fewer people are filing claims, and that means businesses are keeping their employees safer.
“On the medical side, medical claims, which will cause workers’ comp to go up, people are being treated more quickly,” Pieciak said. “They’re seeing doctors quicker, they’re getting better care, and that’s letting them come back to work sooner.”
Pieciak said the major reason any businesses would see premiums go up this year is if their workers got hurt a lot in the previous year and they saw an increase in claims.
In a news release, Gov. Phil Scott said the savings would “directly lower the cost of doing business in Vermont” and would help make the state “a more affordable place to do business and creates more opportunity for businesses to thrive, grow their operations and support more workers.”
About 79 percent of Vermont businesses that don’t self-insure participate in the so-called voluntary market, according to the department, in which businesses have enough history as an employer to be charged based on their individual risk.
The other 21 percent participates in the assigned risk market, in which businesses are so new that insurers assign how much risk they pose based on the characteristics of their business.
Businesses that self-insure for workers’ compensation are outside these two markets, according to Pieciak. Businesses that self-insure for workers’ comp tend to be larger, he said.
