By: Brett Findlay, Vice President, Business & Construction Risk, OneGroup
There have been significant changes applicable to New York State workers’ compensation this year. An aggregate rate decrease on the horizon, an increase to the maximum weekly payroll limitation and an increase to the maximum workers’ compensation weekly benefit will most likely have the largest potential impact.
New York State employers will again benefit from an aggregate rate decrease to their workers’ compensation programs over the coming year.
On May 14th, 2021 the New York Compensation Insurance Rating Board filed its annual loss cost indication with the New York State Department of Financial Services. An approved and published filing for the expected decrease of 6.4% of the overall loss cost level was then announced on July 15th, 2021. The change in rates is effective on policies renewing on or after October 1, 2021. This is the sixth consecutive year with an overall workers’ compensation loss cost decrease in New York State.
The impact of the loss costs, or rates, will vary depending on each individual classification code.
Again, it is important to note that these rate changes will not go into effect on any individual policy until October 1. If your effective date is before that date, you will have to wait until your policy renewal before any potential rate changes apply. Regardless of when your effective date is, you should know the exact rate changes to your classifications sooner rather than later. It’s important to not only forecast the future costs of your program, but also to develop a marketing plan for your upcoming renewal.
I anticipate that this type of rate fluctuation will cause some volatility in the insurance marketplace. Insurance carriers may look to using higher loss cost multipliers, amongst other possibilities, in order to offset rate decreases. You should be in front of this, as should your broker.
Additionally, the maximum weekly payroll limitation/cap for eligible classifications has risen significantly. Effective July 1st, 2021, the new cap will be $1,594.57. This is a 9.1% increase from the prior years’ cap of $1,450.17. There will be an impact on the cost associated with eligible employers’ workers’ compensation premium.
Also effective July 1st, 2021, the maximum weekly workers’ compensation benefit increased by 9.1% as well. The new maximum benefit is $1,063.05 as opposed to the prior years’ $966.78.
You may ask what this means? For any individual questions and/or concerns, please do not hesitate to contact us at your earliest convenience.
For a better understanding on the potential impact to your business, please reach out to Brett Findlay, Vice President of Business & Construction Risk, OneGroup. You may reach Brett direct at (315) 280-6376 or email BFindlay@OneGroup.com.
OneGroup is a team of specialists, dedicated to risk management and construction industry specific insurance issues. OneGroup serves as a resource to your organization for all your construction specific questions and concerns. And takes great pride in being at the forefront of industry trends. You can learn more about OneGroup at: www.OneGroup.com or more specifically, http://www.OneGroup.com/business-insurance/unique-industry-solutions/construction-industry/.