North Dakota's workers’ compensation agency is seeking a 3.3% average rate hike that would raise companies' annual insurance bills by nearly $5 million. In a down economy, that's not what companies need.
Industry group spokespersons report employers hope the Workforce Safety and Insurance agency will use dividend rate credits to soften the increase in their costs. A round of credits is likely to accompany the new rates, which are expected to go into effect July 1.
Dividends are offered when the agency's investment reserves hit specific levels. They were eliminated in 2009, a consequence of the stock market drop. During the prior four years, the agency's investment surplus was used to cut employers' annual insurance bills between 40% and 62%.
North Dakota law mandates WSI distribute dividends if its surplus is at least 40% greater than its required financial reserves.
In December, the agency's surplus was close to 45% higher than its required reserves, according to its most recent operating report.
The majority of the proposed rate rise is linked to an increase in the state's average wages. Workers’ compensation insurance rates are presently applied to each worker's first $23,700 of annual wages; the agency's proposal would dictate the initial $24,700 of annual wages would be taxed beginning July 1. (workersxzcompxzkit)
The WSI advisory board is slated to meet April 15 to decide if it will recommend the rate plan to Gov. John Hoeven.
Author Robert Elliott, executive vice president, Amaxx Risks Solutions, Inc. has worked successfully for 20 years with many industries to reduce Workers' Compensation costs, including airlines, health care, manufacturing, printing/publishing, pharmaceuticals, retail, hospitality and manufacturing. He can be contacted at: [email protected] or 860-553-6604.
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