HARRISBURG, PA — The Pennsylvania Insurance Department (PID) and the Department of Labor & Industry (L&I) have approved an 8.67% reduction in loss costs, a key component used to determine workers’ compensation insurance rates. This change is expected to lower insurance premiums for numerous businesses across the state, creating financial relief while maintaining critical protections for workers.
This reduction was derived from a loss-cost filing by the Pennsylvania Compensation Rating Bureau (PCRB), an independent entity representing workers’ compensation insurers in Pennsylvania. Loss costs reflect the projected expenses for paying claims related to workplace injuries, including medical care, rehabilitation, lost wages, and death benefits for dependents of employees who suffer fatal work-related injuries.
Insurance Commissioner Michael Humphreys highlighted the importance of a well-functioning workers’ compensation market for both employees and employers. “A competitive workers’ compensation market is beneficial to both workers and businesses,” Humphreys said. “This ensures Pennsylvania businesses have the tools they need to provide the necessary coverage workers rely on in the event of a work-related accident, and it also reassures hard-working Pennsylvanians that they’re protected when the unexpected happens. Our Department will continue to work toward continued reductions in years to come.”
Impact on Businesses
The workers’ compensation system in Pennsylvania is critical for protecting the state’s workforce while allowing employers to manage risks effectively. Approximately 370 insurance companies currently offer workers’ compensation coverage in the state, giving businesses multiple options for finding affordable and suitable policies.
While the level of premium savings will vary across individual businesses due to factors such as risk classification and claims history, the reduction in loss costs is expected to directly benefit employers. Lower premiums could free up funding for businesses to reinvest in operations, hire more staff, or upgrade equipment.
One proven way for Pennsylvania businesses to see additional savings is through the formation of Certified Workplace Safety Committees. These committees not only promote safer working environments but also help employers earn a 5% discount on annual workers’ compensation insurance premiums. Over time, thousands of businesses have collectively saved millions thanks to this initiative.
Ongoing Commitment to Workplace Safety
Secretary of Labor & Industry Nancy A. Walker commended the reduction in loss costs as a positive development for the state. “Today’s reduction in workers’ compensation loss costs is a positive step forward in supporting both Pennsylvania’s workforce and its businesses,” Walker stated. “By lowering premiums, we’re ensuring that employers can continue to afford the critical coverage their employees rely on in the event of a workplace injury, while also providing workers with the protection they deserve. This collaborative effort underscores our commitment to creating a balanced and sustainable workers’ compensation system that benefits all Pennsylvanians.”
She further emphasized the Department of Labor & Industry’s dedication to equipping businesses with resources to ensure safer workplaces while continuing to prioritize the well-being of employees across industries.
Effective Date
The reduction in loss costs takes effect today, April 1, 2024. Any new or renewed policies issued on or after today will reflect the updated rates, providing immediate benefits for businesses navigating an uncertain economic landscape.
This move represents a wider strategy to balance economic growth with workplace protections, ensuring businesses continue to thrive while offering employees the support and coverage they need in times of crisis. Pennsylvania officials reaffirm their commitment to enhancing safety, efficiency, and accessibility within the workers’ compensation system, benefitting businesses and workers alike.
For the latest news on everything happening in Chester County and the surrounding area, be sure to follow MyChesCo on Google News and MSN.