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Workers’ compensation costs to drop for eighth-straight year

For immediate release

Sept. 9, 2020

Contact information

​​​Aaron Corvin, Public Information Officer
971-718-6973, aaron.corvin@dcbs.​
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Salem, OR — In 2021, Oregon employers, on average, will pay less for workers’ compensation coverage, the Oregon Department of Consumer and Business Services (DCBS) announced today. The decline in costs marks eight years of average decreases in the pure premium rate – the base rate insurers use to determine how much employers must pay for medical claims and lost wages. 

Underpinning the cost decreases is the success of Oregon’s workers’ compensation system, which includes programs to control costs, maintain good worker benefits, ensure employers carry insurance for their workers, and to improve workplace safety and health.

The numbers illustrate positive, long-term trends:
  • Employers, on average, will pay $1.00 per $100 of payroll for workers’ compensation insurance in 2021, down from $1.05 in 2020, under a proposal by DCBS. That figure covers workers’ compensation claims costs, assessments, and insurer profit and expenses.
  • The pure premium rate will drop by an average 5.6 percent under the proposal. In fact, the pure premium – filed by a national rate-setting organization and reviewed by DCBS – will have declined by 48 percent during the 2013 to 2021 period.
Oregon’s lost-time claim frequency “has generally been decreasing moderately” while the severity of wage-replacement and medical costs “are showing a long-term downward trend,” according to the National Council on Compensation Insurance (NCCI), the U.S. rate-setting organization whose recommendation DCBS reviews as part of its annual public process to decide rates.
Employers’ cost for workers’ compensation insurance covers the pure premium and insurer profit and expenses, plus the premium assessment. Employers also pay the Workers’ Benefit Fund assessment, which is a cents-per-hour-worked rate. 

The decrease in the pure premium of 5.6 percent is an average, so an individual employer may see a larger or smaller decrease, no change, or even an increase depending on the employer’s own industry, claims experience, and payroll. Also, pure premium does not take into account the varying expenses and profit of insurers.  

Helping sustain the trend in lower costs is the stability of Oregon’s workers’ compensation system. The system includes the Workers’ Compensation Division; Oregon OSHA; the Workers’ Compensation Board, which resolves disputes over the state’s workers’ compensation and workplace safety laws; and injured worker and small business advocacy services.  

Those successful programs are funded by the premium assessment. 

The premium assessment is a percentage of the workers’ compensation insurance premium employers pay. It is added to the premium. It would increase from 8.4 percent this year to 9.0 percent in 2021. 

The premium assessment is affected by the pure premium and the economy – in order to provide stable funding for programs that support Oregon’s workers’ compensation and worker safety programs, an increase in the assessment is needed to partially counteract a decline in pure premium. 

The 0.6 percentage point increase is also meant to partially offset an anticipated decline in revenue triggered by economic conditions. At the same time, DCBS has already begun to reduce its planned expenses to help offset the reduction in revenue.  The agency will continue to closely monitor its revenue and expenses in light of uncertainties in the economy. 

“As we move forward with our rate-setting process, we are focused on taking a cautious, balanced approach,” said Andrew Stolfi, DCBS director and insurance commissioner. “It’s an approach that accounts for a tough economy and that helps stabilize programs that benefit employers and workers.”

Meanwhile, the Workers’ Benefit Fund assessment provides benefit increases to permanently disabled workers and to families of workers who died from a workplace injury or disease. It also supports Oregon’s efforts to help injured workers return to work sooner – through incentive programs to employers – and earn their pre-injury wages. 

The fund’s revenue comes from a cents-per-hour-worked assessment. The assessment would see no change in 2021, remaining at 2.2 cents per hour worked.

The decrease in the pure premium will be effective Jan. 1, 2021, but employers will see the changes when they renew their policies in 2021. The assessment changes will be effective Jan. 1, 2021. 

Oregon’s workers’ compensation premium rates have ranked low nationally for many years. Oregon had the sixth least expensive rates in 2018, according to a nationally recognized biennial study conducted by DCBS. That was an improvement from Oregon’s ranking as the seventh least expensive state the last time the study was done in 2016. 

The cost chart summarizes the changes and includes information about how to participate in the virtual public hearing set for Thursday, Sept. 17, at 3 p.m. 

More information about Oregon workers’ compensation costs.


About Oregon OSHA:

Oregon OSHA, a division of the Department of Consumer and Business Services, enforces the state's workplace safety and health rules and works to improve workplace safety and health for all Oregon workers. For more information, go to

The Department of Consumer and Business Services is Oregon's largest business regulatory and consumer protection agency. For more information, go to

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