New Rates Go into Effect in July; Decrease Creates Significant Savings for Small Businesses and Other Policyholders Across the State.
Massachusetts businesses will save approximately $80 million under a settlement Attorney General Maura Healey reached with the State Rating Bureau (SRB) and the Workers’ Compensation Rating and Inspection Bureau (WCRIB). The settlement, which follows an intervention by the AG’s Office in an administrative rate hearing at the Division of Insurance, results in an average rollback of about 3.5 percent on workers’ compensation insurance rates.
The new rates are set to go into effect on July 1, 2022.
“This settlement will save millions of dollars for Massachusetts businesses – many of whom are still struggling to recover from the pandemic,” said AG Healey. “Not only does lowering workers’ compensation insurance rates help small businesses, allowing them to invest in higher wages and growth, but it also helps protect workers.”
Workers’ compensation insurance rates are set periodically in administrative rate hearings before the Division of Insurance. The state’s insurance companies generally work together to prepare a single joint filing and submit that for approval to the Commissioner. The AG’s Office can intervene in these proceedings and litigate against the proposal to protect the public interest. Massachusetts businesses are required to purchase workers’ compensation insurance to provide coverage for workers injured on the job including medical costs and a portion of their lost wages.
In December 2021, the industry sought an overall statewide average rate increase of 2.7 percent and the AG’s Office intervened in the rate proceeding seeking a rate rollback for Massachusetts ratepayers. The industry agreed not only to abandon its request to increase rates, but also to apply an average rate rollback of 3.5 percent for policyholders starting in July.
The AG’s Office has also previously been successful in achieving workers’ compensation rate reductions. After AG Healey intervened in the rate hearings in 2020, insurers agreed to roll back rates by an average of 6.8 percent, saving Massachusetts customers about $80 million. In 2018, the AG’s Office successfully secured a 12.9 percent average rate rollback on workers’ compensation insurance in the state, saving approximately $150 million for businesses. Over the past 10 years, the AG’s Office has saved employers and small businesses hundreds of millions of dollars by intervening in workers’ compensation insurance administrative rate cases. These savings translate into more jobs for workers in the state.
The AG’s Insurance and Financial Services Division represents the public interest and litigates administrative rate cases to ensure that rates are fair for Massachusetts policyholders. The AG’s Office has worked collaboratively with the State Rating Bureau to achieve the rate reduction in the present workers’ compensation insurance rate case.
This matter was handled by staff of AG Healey’s Insurance and Financial Services Division, including Peter Leight, Dr. Burt Feinberg, Madonna Cournoyer, Lilia Dubois, Mike Sugar, Bridget Menkis, Gia Kim, and Glenn Kaplan.