R.I. Lowers Workers’ Comp System Assessment

August 18, 2004

Rhode Island officials have decreased the premium assessment that insurers must charge to cover the costs of
administering the state’s workers compensation system.

Effective July 15, 2004, the Workers’ Compensation Administrative Fund reduced its annual assessment on the premiums insurers charge from 6.75 percent to 6 percent, a reduction of $2.3 million. This change will affect workers’ compensation insurance policies written in 2003.

The assessment funds the state’s Workers’ Compensation Court and the Workers’ Compensation Division of the Department of Labor and Training. Services include rehabilitative programs for injured workers, investigation of fraud and employer compliance, education on the system, and data collection.

The administrative fund was created to distribute the cost of the workers’ compensation system across the parties that use it, rather than burdening the general taxpaying population. The Director of the Department of Labor and Training is required to evaluate the cost of the workers compoensation system, then levy a charge against insurers to cover fund expenses.

Adelita S. Orefice, the Director of the Department of Labor and Training, attributed the dramatic reduction to several factors, including the department’s investigation and enforcement actions taken against employers who fail to maintain workers’ compensation insurance. This boost in revenue, coupled with increases in total employment wages and improved administrative efficiency at both the Department and the Workers’ Compensation Court, caused revenue to exceed expense and created the opportunity for the reduction, she maintained.

Judge George E. Healy, Chief Judge of the Workers’ Compensation Court, complimented the department on its efficient management of the fund. “Today’s announcement will have an extremely positive impact on the state’s economic outlook.”

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