The Massachusetts Division of Insurance has rejected a proposal to raise the cost of workers’ compensation coverage by 18.8 percent. Had the rate change taken place, it would have cost Massachusetts businesses an estimated $175 million.
By law, Massachusetts businesses are required to carry workers’ compensation insurance to cover medical treatment and wage replacement for employees injured in the workplace. At least every other year, the rates are reviewed in an administrative hearing before the Commissioner of Insurance. The Massachusetts Workers’ Compensation Rating and Inspection Bureau was behind the proposed rate increase.
Attorney General Martha Coakley vigorously opposed the increase. “The industry’s request to raise rates could not have come at a worse time for small businesses in Massachusetts,” she said in a statement released by her office. “We believed the proposed rate hike was completely unjustified, and we litigated to stop it. Blocking the rate increase helps ensure that companies do not overpay for workers compensation insurance, reducing the cost of doing business here in Massachusetts. We applaud the Division of Insurance for this decision today.”
Regulators spent months looking into the proposed increase and analyzing data. In the end, they found no justification for the increase, which is a welcome relief for Massachusetts employers. The Attorney General’s Office demonstrated that the increase was based on unreasonable projections, inflated net loss trends and a profit provisions that underestimated the amount of money that the insurers would make off of premiums.
Small businesses in particular are glad to hear that their rates will not go up. Because workers’ compensation insurance is a mandatory expense, a rate hike in premiums could seriously impact profit margins for already struggling small businesses.
Massachusetts Workers’ Compensation Attorneys Can Help
If you have been injured on the job in Massachusetts, you may be entitled to workers’ compensation to cover the costs of your medical care and lost wages. The Massachusetts workplace injury lawyers at Kantrovitz& Associates, P.C., are here to help you get worker’s compensation.