Hawaii Workers’ Comp Rates Dropping

The cost to Hawaii businesses for workers’ compensation premiums may be cut for the sixth straight year as officials say workplaces have become safer.

The National Council on Compensation Insurance has filed a request with the state Insurance Division for an 11.6 percent cut in “loss costs,” which reflects the amounts paid for claims by insurers. The filing would affect premiums paid by businesses starting Jan. 1.

The reduction is based on a continuing decrease in the number of claims filed in 2006, the last year complete data are available.

Over the last three years, state Insurance Commissioner J.P. Schmidt has approved decreases of 19.3 percent, 18.2 percent and 12.3 percent in loss costs as evidence began to show a significant reduction in claims.

This latest reduction brings the total decrease in workers’ comp loss costs to 61 percent over the past four years, Schmidt said Wednesday.

“This is one of the largest declines in workers’ compensation insurance rates of any state in the nation,” Schmidt said. “These lower rates show that the great efforts of Hawaii’s employers and our employees have been effective in providing a safer work place for our work force.”

He said the lower workers’ compensation rates will help Hawaii employers offset some of their other rising costs.

Schmidt said the state Department of Labor and Industrial Relations’ Hawaii Occupational Safety and Health Division has made great strides in working with island employers and labor organizations in creating safer and healthier workplaces.

The efforts, combined with strong and effective enforcement of the state’s workplace safety and health laws, have led to fewer workers’ comp claims, he said.

Schmidt noted “marked improvements in streamlining and expediting the hearing process.” He said claims are being resolved in a timely manner.

“However,” he added, “we still need to work with the Legislature to reduce the adversarial nature of the system and improve the quality of care to our injured workers so that they can return to work promptly without the financial impact associated with an unnecessary prolonged absence from work.”

A study by the Oregon Department of Consumer and Business Services showed Hawaii had the fourth highest premiums in the nation in 2004 and ranked 15th in 2006, he said.