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News & Press: Regulatory

Workers' Compensation 2016 Rates

Thursday, July 28, 2016   (0 Comments)
Posted by: Sarah Bass
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From M3 Insurance: Senior Living & Social Services 

 

In Wisconsin, Workers’ Compensation premium rates are set by the state. Every year, the Wisconsin Workers’ Compensation Rating Bureau recalculates the rate changes for Workers’ Compensation insurance. The new rates have been published and will become effective for Workers’ Compensation policies with an effective date of October 1, 2016 and after.
 
The overall rates in Wisconsin have decreased by approximately 3.19%; however, each class code is calculated individually. The long-term care industry includes several different class codes, outlined below. 
 
Overall, the long-term care industry rates are up approximately 1.5% versus 2015 rates. The industry staffing crisis appears to show in these results, including, the high turnover, staffing shortage and part time employees’ eligibility for full time pay.
 
Class Code Description
Current
2015 Rates
New
2016 Rates
% of Change
8810 Clerical/Office 0.25 0.24 -4.0%
8824 Assisted Living - Care giving 6.22 6.14 -1.3%
8825 Assisted Living - Food Service 3.01 3.20 6.3%
8826 Assisted - All Other 3.84 4.14 7.8%
8842 Group Homes 4.51 4.79 6.2%
8835 Home, Public, Traveling Healthcare 3.35 3.18 -5.1%
 
Assisted Living is broken out into three different classes; care giving, food service and all other. After a significant increase last year (10.1%), care giving has decreased by 1.3%. Food Service and the “all other” category have seen increased rates again this year, as indicated above.
 
Changes to the Workers’ Compensation rates can impact the experience modification factor. As a reminder, the mod is a measure of a provider’s individual loss experience compared to the expected loss experience across a given industry. When the rate goes up for a given class code, everything else being equal, the specific experience mod will decrease since the individual experience is now relatively lower than the expected loss ratio.
 
Experience mods will also be affected starting October 1, 2016 because the state has adjusted the experience mod formula to reflect medical cost inflation. The frequency of claims per $100,000 of payroll and lost time cases are the biggest factors in Workers’ Comp premiums.
 
Continued focus on improving safety in areas like resident handling, slips, trips and falls, and behaviors, will bring down your community’s Workers’ Compensation costs. Your insurance agency and carrier can help support your risk management efforts and benchmarking needs.

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