The Baker administration said Wednesday that businesses will pay an assessment of 3.83 percent on their insurance premium, as compared with the current 4.56 percent. The new assessment rate will go into effect on Sunday, when the state’s 2019 fiscal year begins.
While, this news is great for Massachusetts employers, this does not address the state’s overall low rates that are driving carriers out of the state.
Under state law, businesses have to provide workers’ compensation insurance to their employees to cover them for injuries or illnesses suffered on the job. The assessments on businesses help fund the state’s Department of Industrial Accidents, which oversees the workers’ comp. system.
When Gov. Charlie Baker took office in January 2015, the assessment rate for workers’ compensation was 5.8 percent of employers’ premiums. It’s fallen every year since. The biggest drop during Baker’s term came last year, when the rate dropped by nearly a fifth.
The new 3.83 percent rate is the second-lowest rate in the past decade, behind the 3.34 percent that businesses paid the state in the 2014 fiscal year under Gov. Deval Patrick. The highest rate this decade came during the 2010 fiscal year, when it rose up to 7.22 percent.
Administrations typically seek to lower the rate as much as they can, while maintaining the workers’ comp. fund’s financial stability.