In September, the N.C. Rate Bureau announced that, effective April 1, 2017, job creators in North Carolina would continue to see their costs for workers’ compensation claims go down – this time by an average decrease of 14.4 percent from the loss costs that took effect in April of this year, when average rates fell by about 10 percent.
According to the Rate Bureau, job creators in different industry groups can expect to see their average workers’ compensation costs vary from the overall average “depending upon the volume and character of the particular classification experience.” Average decreases for manufacturing, contracting, office & clerical, and goods & services are as follows:
- Manufacturing: -13.7%
- Contracting: -11.7%
- Office & Clerical: -19.4%
- Goods & Services: -14.7%
Going back to 2011, when the NC Chamber successfully supported workers’ compensation reforms enacted by House Bill 709, we have been strongly engaged in advocating for comprehensive solutions to increase certainty and decrease employer costs in the workers’ compensation system. House Bill 709 required the North Carolina Industrial Commission (NCIC) to adopt rules in compliance with the Administrative Procedures Act (APA) by December 31, 2012; after businesses and other pro-growth organizations objected to those rules as unfavorable to the original intent of the bill, the NC Chamber helped to secure their repeal with the passage of Senate Bill 174 during the 2013 session.
In turn, Senate Bill 174 provided instruction to the NCIC on how to amend workers’ compensation rules in order to realize the full cost-saving intent of reforms. It set the stage for a collaborative process between the business community, insurers, hospitals and doctors to negotiate a more predictable Medicare fee schedule for employers. The NC Chamber served as a strong voice on behalf of the business community throughout this two-year negotiation process, resulting in a phase in a three-year phase-in of a new Medicare fee schedule where employers pay a specified percentage above Medicare rates. This process has created greater predictability by developing a defined cost for each medical procedure.
We will enter the third and final year of this phase-in when new rates take effect next April. The fact that employers across all industry groups can expect to see their average rates go down again in 2017 is strong evidence that the positive reforms we have made to our workers’ compensation system are working as expected to save job creators on their bottom lines. The NC Chamber is proud of the role we have played, and will continue to play, to ensure North Carolina employers keep seeing their workers’ compensation rates fall, year after year.
Gary J. Salamido
Vice President, Government Affairs
North Carolina Chamber