On September 8, the Department of Consumer and Business Services (DCBS) announced that average pure premium rates will decline by another 1.8 percent for 2011.
DCBS also announced a proposed increase in the premium assessment rate of 1.8 percentage points, from 4.6 percent to 6.4 percent of premium. The net effect would be no change in the average cost to employers.
This announcement marks the 21st consecutive year without a pure premium rate increase for Oregon employers. No other state comes close to matching that record.
Five straight years of decreases since 2006 will produce a cumulative drop in the pure premium rate of 13 percent. SAIF's policyholders have contributed to this success by preventing injuries and proactively getting injured workers back to productive employment.
The premium assessment, which is collected by SAIF and other insurers on behalf of DCBS, is used to fund programs administered by DCBS: injured worker and employer assistance, worksite consultations and safety training, workers' compensation dispute resolution, administration of workers' compensation laws, and safety and health inspections.
DCBS has downsized its operation due to revenue decline and, as a state agency, its employees have participated in the unpaid furlough days taken by state employees. Nevertheless, certain fixed costs continue regardless of premium assessment income. In order to maintain the appropriate level of services to employers and injured workers and allow the department to maintain the reserve fund at a level it believes is prudent for the long term, DCBS has proposed this increase in the assessment rate. If the proposed rate is confirmed, it will apply to all premiums reported for coverage on and after January 1, 2011.
"We're very sensitive to employer costs, particularly in these economic times," said DCBS Director Cory Streisinger. "But we also want to preserve the long-term value that our workers' compensation system delivers. Though an assessment increase is never easy, we've worked to hold it down to a level that's offset by this year's decline in pure premium—so employer costs won't go up."
An employer's actual premium cost for 2011 depends on a variety of factors, including changes in payroll. Although the average base rates will not change, most classifications will have either a small increase or a small decrease. SAIF will not change its filed rates for 2011, but individual employers may experience increases or decreases depending on their recent experience. Individual rate changes will take effect on the date the policy renews in 2011.
Read the DCBS Q&A
View the pure premium rate chart