12 Oregon Trucking Association, Inc. Oregon Truck Dispatch Oregon Workers’ Compensation Updates AS WE USHER in 2024, many businesses are in the process of strategic planning and finalizing budgets for the new year. As businesses work through this planning period, it is important to keep in mind that several changes in workers’ compensation rates and claim systems may impact these processes. Adjustments from the National Council on Compensation Insurance, changes to Oregon’s Pure Rates, and legislative changes will all play a role in Oregon’s new workers’ compensation rates for 2024. NCCI Experience Modification Factor Adjustments The National Council on Compensation Insurance (NCCI) recently concluded an extensive, multi-year evaluation of the Experience Rating Modifier (ERM), the number that insurance companies use to determine your rates based on your company’s historical cost of injuries and future risk chances. The revised experience rating modifiers, which are broadly recognized as being more dependable and more precise, took effect on November 1, 2023. For Oregon policyholders, these changes have specific implications. The traditional formula for calculating the experience modification rate involves a primary and excess split point, to weight both frequency and shock losses with the national threshold set at $18,500 for frequency. Recognizing the considerable variation in claims costs among states due to factors such as state level medical costs, wages, and legislation, the NCCI is transitioning to state-specific thresholds. The split point for Oregon has been set at $9,500 for 2024. Additionally, the NCCI is moving from a national maximum state accident limit to a state-specific limit. The 2024 maximum limit for Oregon is $97,500, in contrast to the previous national cap of $213,500. How will these changes impact you? The split point plays a crucial role in the calculation and weighting of frequency. Preliminary reviews indicate that employers with fewer claims than expected (or low frequency) may experience a reduction in their modifier by an additional point or two. Conversely, those with a higher number of claims or high frequency might see a corresponding increase in their modifier. According to NCCI, the proposed adjustments are expected to lead to an increased number of mods falling within the rating range of 0.90 to 1.00. Oregon Pure Rates Pure Rates represent the anticipated cost per $100 of payroll required to cover claims within a specific class code. Insurance carriers use these rates to determine the premiums charged to policyholders. The pure rate is multiplied by an expense load factor, which accounts for risk, profit, and overhead. NCCI calculates pure premiums, while the Oregon Department of Consumer and Business Services (DCBS) approves both Expense Loading Factors and Pure Rates. This regulatory oversight ensures fairness and transparency in the determination of insurance premiums. For 2024, the Oregon DCBS approved the NCCI pure rate filing with a noteworthy 6.7 percent decrease in the average pure premium rate. It is crucial to note that By Jennifer King, WHA Insurance
RkJQdWJsaXNoZXIy MTY1NDIzOQ==