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Workers’ Compensation Costs Are Down Again

| Labor & Workplace

As of April 1, workers’ compensation costs fell once again for North Carolina’s employers. Last 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. This is an even greater reduction from the costs that took effect in April of 2016, when average rates fell by about 10 percent.

According to the Rate Bureau, the cost decreases vary for job creators in different industries “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%

The NC Chamber has been strongly engaged in advocating for comprehensive solutions to increase certainty and decrease employer costs in the workers’ compensation system. In 2011, we successfully supported workers’ compensation reforms enacted by House Bill 709, which required the North Carolina Industrial Commission (NCIC) to adopt rules in compliance with the Administrative Procedures Act (APA) by December 31, 2012. When businesses and other pro-growth organizations objected to those rules as unfavorable to the original intent of the bill, the NC Chamber then helped 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. This legislative victory 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 the implementation of 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 entered the third and final year of this phase-in at the start of the month when the new rates took effect. The fact that employers across all industry groups are now witnessing their average rates drop again is strong evidence that the positive reforms we have made to our workers’ compensation system are working as expected, saving job creators on their bottom lines. The NC Chamber is proud of the role we played, and will continue to play, in reducing workers’ compensation rates for North Carolina employers.

Gary J. Salamido
Vice President, Government Affairs
North Carolina Chamber