Workers’ Comp Industry Improved in 2014 But NCCI Sees Trouble Ahead

The workers’ compensation industry had a pretty good 2014 in which its combined ratio improved for the third consecutive year, premium grew for the fourth consecutive year, and claim frequency declined about two percent.

But the results in 2014 were not enough to relax officials at the industry’s rating and statistical organization, the National Council on Compensation Insurance (NCCI).

NCCI, which is the official rating and statistical organization for more than 30 states,  today released its annual State of the Line workers compensation market analysis in which the group describes the current state of the industry as “calm now … but turbulence ahead.”

Challenges Ahead

“The most recent results show that 2014 was a good year for the industry—and that follows solid results in 2013,” said NCCI President and CEO Steve Klingel. “It would be great if these results marked the beginnings of a new trend line, but ours is a business that runs in cycles. And despite the current calm conditions, we are anticipating turbulence ahead.”

NCCI says that among the challenges facing the workers’ compensation industry are that claim severity increased slightly more than inflation measures for indemnity and medical costs and a continuing low-interest-rate environment threatens investment results over the long term.

Also, while premium volume continues to increase, construction and manufacturing employment totals remain well below pre-recession levels, which is restraining even higher premium growth rates. Read more

The Premium Cost Containment Program

In 1989, the Colorado legislature enacted the Premium Cost Containment Program. Under this program, employers who implement and maintain a standardized loss prevention/loss control program, and achieve certification status are eligible for a reduction on their workers’ compensation insurance premiums. By preventing injuries and lowering costs of claims, these employers also contribute to the stabilization and possible reduction of the standard rates set for their respective industries. Certification status is granted by the Premium Cost Containment Board to employers who can document that they have had a loss prevention/loss control program in effect for at least one year.
The six minimum requirements for certification in the program are:
1.Declaration of Policy
2.Safety/Risk Assessment Committee and/or Coordinator
3.Safety/Loss Prevention Rules
4.Safety/Loss Prevention Training
5.Designated Medical Provider
6.Written Claims Management Procedures

The basic requisites are summarized in the Essentials Premium Cost Containment Program & Employer Certification booklet on the Division website.

Should workers’ comp cover mental and emotional distress?

State lawmakers in Connecticut are pushing to expand the state’s workers’ compensation program to cover mental and emotional fallout among employees as a result of “extreme workplace violence.”

S.B. 593 defines such qualifying incidents as witnessing the death or maiming of another person in the workplace, or its immediate aftermath. Under its stipulations, workers’ compensation coverage would be available to any employee that a licensed psychologist or psychiatrist diagnoses as suffering from extreme distress.

Another, similar bill was also introduced in the Senate—S.B. 105, which would expand the legal definition of “personal injury” to include events in which a person suffers after seeing someone killed or maimed by another person while at work.

Supporters say the current law “does not reflect the reality” that mental trauma can have severe, lasting influences on employees. Read more

Colorado Workers’ Comp Law Changes April 1

Colorado Workers’ Comp Law Changes April 1

During the 2014 Colorado Legislative Session, state lawmakers passed House Bill 1383, which increases from two to four the number of medical providers an employer or their insurer must designate for the employer’s injured workers to choose from. At least one of the providers must be at a distinct location and from distinct ownership from the other three. Colorado employers will need to take action before the law goes into effect April 1, 2015.

Like the previous law, there are exemptions for policyholders located in rural areas of the state:

• If there are at least four, but fewer than nine providers at distinct locations and without common ownership within 30 miles of the employer, the employer can designate

two providers at distinct locations and without common ownership. Read more