Las Vegas Sun

March 28, 2024

Panel recommends rise in workers’ comp rates

CARSON CITY -- After two years of decreases in workers' compensation insurance rates, a state advisory council has recommended that Nevada employers pay more to cover workers injured on the job.

The National Council on Compensation Insurance has suggested the average rate rise by 2.5 percent starting in January. The council is advisory to state Insurance Commissioner Alice Molasky-Arman, who said Thursday she expects to make a decision by the end of October.

"It would have been preferable to continue the trend of rate reductions, but the inflationary pressures on workers' compensation costs must be recognized," Molasky-Arman said.

She said the suggested increase "appears to be modest." The average rate charged in 2005 was 6.5 percent lower than in 2004, which was 12.3 percent below the rate charged in 2003.

The council said increased medical expenses, particularly prescription drug costs, are a major reason for the proposed rate increase. Rates charged an employer are based on safety records. Those with fewer injuries receive lower rates.

The rate adjustments vary between industry groups. For example, rates in contract construction would fall an average of 6.1 percent, but employers in the office and clerical group will see an average 10.2 percent increase.

Rates are assessed based on $100 of payroll per employee, with a $36,000 maximum salary per employee.

For businesses in the high-risk category or those smaller businesses that may not be able to find insurance coverage, the average rate increase will be 0.2 percent. This year the rates in this category were 6.9 percent lower than in 2004 and 9.1 percent lower in 2004 than in 2003.

Molasky-Arman said the recommended rate adjustment by the council is only one component of the rates charged by insurers. Each insurance company must file financial statements.

"As a result, not every insurer charges the same rate," she said. "I urge employers to comparison shop for the best rate," she said. "In a competitive environment, such behavior is essential to maintain an efficient market."

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