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Second workers' comp hike OKed

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Pennsylvania employers face a small hike in workers' compensation premiums starting in April, the second increase this year in the cost of insuring against workplace injuries.

The first increase took effect Feb. 1 and, at 6.06 percent, represented one of the biggest jumps in workers' comp premiums in 25 years. 

The second hike, slated to take effect April 1, is 0.7 percent, according to the Pennsylvania Compensation Rating Bureau, a Philadelphia-based independent nonprofit that helps set workers’ comp premiums in the commonwealth.

The increase was approved Feb. 2 by Pennsylvania's acting insurance commissioner, Jessica Altman, according to the bureau.

Both jumps follow a state Supreme Court ruling last summer invalidating a portion of the state's workers' comp law, a move that some expect to result in higher costs for employers.

The ruling barred the use of so-called impairment rating evaluations, or IREs. The evaluations allowed companies to cap costs for paying out wages lost due to injury, typically in cases where workers could not return to work.

Lawmakers have introduced legislation to restore use of IREs. But it has not moved.

Workers' comp rates typically are adjusted once a year. But after the court ruling, the rating bureau took the rare step of asking for an interim increase, which is the 6.06 percent hike that took effect this month.

Both increases apply to policies that are newly written or renewed after the effective dates.

But because of earlier reductions, employers whose policies renew between Feb. 1 and March 31 will still see a slight decline of 0.53 percent in their premiums, according to John Pedrick, vice president of actuarial services for the rating bureau. The decline is less than the 6.21 percent cut they would have enjoyed in the absence of the interim filing.

The cumulative impact of the two increases this year works out mathematically to a 6.8 percent increase for policies renewing after April 1, Pedrick said in an email.

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Write to the Editorial Department at editorial@cpbj.com

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