Beginning in 1986, the State of Oregon has analyzed workers’ compensation premium rates in all U.S. states and the District of Columbia using a methodology that controls for interjurisdictional differences in industry compositions.
The index rates are not, strictly speaking, the premium rates paid by employers in that jurisdiction; instead, they represent the degree to which the premium rates differ from one another within the group. This edition of the study analyzes premium rates effective through Jan. 1, 2022. The ten highest Index Rates in the current 2022 Oregon Workers’ Compensation Premium Rate Ranking Report are as follows:
1 (2020 Position 1) – New Jersey – Index Rate = $2.44
2 (2020 Position 5) Hawaii – Index Rate = $2.27
3 (2020 Position 4) California – Index Rate = $2.26
4 (2020 Position 2) New York – Index Rate = $2.15
5 (2020 Position 8) Louisiana – Index Rate = $2.13
6 (2020 Position 3) Vermont – Index Rate = $1.98
7 (2020 Position 26) Wyoming – Index Rate = $1.86
8 (2020 Position 11) Wisconsin – Index Rate = $1.67
9 (2020 Position 16) Maine – Index Rate = $1.67 131
10 (2020 Position 6) Connecticut – Index Rate = $1.64
There are many reasons why premium rates vary among jurisdictions: Insurers’ administrative costs are constrained by regional market forces; taxes and assessments are imposed at different rates and use different bases; and accidents and illnesses occur at varying rates as natural and random processes. This study attempts to measure the degree of this variation with a consistent and objective statistic: the premium index rate.
The national median index rate is $1.27 per $100 of payroll. This is its lowest value since the inception of the study in 1986, after peaking in 1994.
Since the first study, the range of index rates has narrowed considerably to $1.86 per $100 of payroll, from a high of $2.44 per $100 of payroll in New Jersey to a low of $0.58 per $100 of payroll in North Dakota. However, the number of states within 10 percent of the study median dropped from 21 in 2016, to 14 in 2020 and 2022.