Workers compensation rates to decline
A recommended cut in workers compensation rates in Nevada could provide a boost to efforts to woo new industry to the state.
The National Council on Compensation Insurance recommended an average decrease of 7.6 percent in the portion of workers compensation rates that are established on the basis of loss experience.
Workers compensation companies then add their own figures for administrative costs and profits to determine the rates they offer to customers.
Meanwhile, another employer tax the unemployment insurance rate will remain unchanged at 1.33 percent next year.
The Department of Employment, Training and Rehabilitation said the unemployment fund is running at a deficit, but state Employment Security Division Administrator Cynthia Jones said the state doesn’t want to further burden hard-pressed businesses.
She noted, however, that unemployment taxes will rise at some point in the future to pay back the money the jobless fund is borrowing today.
The new workers compensation rates are scheduled to take effect March 1. State Insurance Commissioner Scott Kipper will make a ruling on the National Council of Compensation Insurance recommendation within the next two weeks.
The proposed reduction is good news to industrial recruiters in the region.
“Workers comp is a major point of pain for companies, especially those in California, which face among the highest rates in the country. Looking at a possible 7 percent decrease in workers comp rates is definitely a plus and gives us an added benefit to show California companies, and others for that matter, the cost savings by doing business in Greater Reno-Tahoe,” said Kevin Frausto, business development manager for the Economic Development Authority of Western Nevada.
Kris Holt, executive director of Nevada Business Connections, an industrial recruitment organization in Carson City, called workers compensation rates “a No. 1 selling point” as the region woos businesses from neighboring states.
The 7.6 percent rate reduction recommended by the national group is an average for all companies that are able to buy workers compensation coverage in the voluntary market. In the assigned-risk program, the recommended decrease is 3.7 percent.
The Nevada Division of Insurance also noted that the size of the proposed decrease varies across industry groups.
For manufacturers in the voluntary market, the recommended cut is 7.4 percent. Contractors would see a 8.8 percent decrease, and office and clerical companies would see a 7.4 percent decrease.
And even within those large sectors, rates can vary even more among individual classes of workers. Carpenters on new home construction, for instance, would see an 11.5 percent decrease.
Kipper said a falling number of claims was the major contributor to the improved loss experience on workers compensation carriers in Nevada.
Safety programs helped reduce the number of claims, he said. The number of workers on the job in Nevada also declined, reducing the number who might be injured.
The falling number of claims, Kipper said, more than offset rising medical costs and more than offset cost-of-living adjustments for workers compensation recipients that have been enacted by the Nevada Legislature.
Concerned that a spate of COVID-19-related lawsuits could bankrupt businesses, members of the Las Vegas Metro Chamber of Commerce implored the state’s congressional delegation during the chamber’s annual D.C. retreat to pass a federal liability protection measure.