Missouri businesses could face significantly higher costs for workers’ compensation insurance next year, due partly to a new law that seeks to shore up a financially troubled state fund for disabled workers.
Workers’ comp insurers in Missouri are likely to see an 11.6 percent increase in their “loss costs” for expected claims in 2014, according to a recent report from National Council on Compensation Insurance. The loss projections typically are used by insurers when setting rates. So it’s possible that businesses could see a double-digit increase in their premiums costs when they renew their workers’ comp policies.
The projected cost increase in Missouri is larger than in most states and is the biggest increase since a 2005 law tightened workers’ comp laws and sent premiums on a downward trend.
One reason for the spike is a law enacted this year that is meant to shore up the financially strapped Second Injury Fund, which makes payments to disabled workers who suffer additional job-related injuries.
The new law shifts some types of injury claims from the Fund to the workers’ comp system. It also allows state officials to impose an additional 3 percent surcharge on workers’ compensation premiums in 2014 to help replenish the Second Injury Fund.
The changes included in the law account for about one-third of the projected cost increase for workers’ compensation insurers. But even without the new law, Missouri’s cost increase would be sizable.
That’s partly because Missouri’s insurers have been paying out more work-injury claims of over $500,000, and more that are significantly over that amount.
Workers’ comp claims may take years to be resolved and paid. For injuries that occurred in 2009, there were 32 claims of over $500,000 each, for a total of $27 million as of two years later, according to NCCI data. For injuries that occurred in 2011, there were 51 claims of over $500,000 each, for a total of $69 million within the subsequent two years.
Topics Trends Legislation Claims Workers' Compensation Missouri
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