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The Montana State Fund building

The Montana State Fund building in downtown Helena.

Thom Bridge,

Employers who get their workers' compensation insurance from the Montana State Fund could see a drop in the premiums they pay for coverage.

The State Fund board will meet Friday to vote on lowering the rates. The public-private organization provides workers' compensation for about 60 percent of employers in Montana, writing 25,826 policies in 2016.

The annual rate review comes after the National Council on Compensation Insurance filed a 10.7 percent decrease in workers' compensation loss cost in Montana. Loss cost is the money insurers pay out in claims and the past year's numbers are used in calculations to set the next year’s rates.

Last year the State Fund voted to drop its rates 5 percent after a loss cost drop of 7.8 percent.

Both private insurance companies and the State Fund use the loss costs numbers when setting their premiums. State Fund sets its rates for employers based on the type of industry they're in and per $100 of payroll.

State Fund President Laurence Hubbard said Wednesday the drop in costs is tied to a handful of things, including fewer workplace accidents.

Since a record high of workers' compensation claims costs in 2006, State Fund premiums have either declined or stayed steady.

Montana also lost construction jobs -- which come with a higher workers' compensation risk than other types of work -- in the recession of 2008, which was a part of the lower loss cost.

“Some of this was probably a natural result of the economic downturn, but after the recovery began in 2009-2010, the decrease continued,” Hubbard said.

Lowering rates is something the State Fund has focused on after a 2016 study found it had the 11th highest premiums in the nation.

“We recognize that businesses are trying to remain competitive with other states and other companies that come into Montana and do work,” Hubbard said. “Any time we can (lower) the cost of doing business that’s a good thing.”

Hubbard said State Fund has also done a number of things to lower its operating costs by creating better outcomes when claims are filed and participating in programs that help injured workers return to and stay employed after their injuries.

While the cost of medical treatment for injured workers has gone up, it’s been relatively stable and predictable, Hubbard said.

“These are good days to be involved in the system because we’re seeing some positive trends, both investments in workplace safety, but also cost containment on the severity side,” he said. “It’s all good news for businesses and workers.”

During a special session of the Legislature in November, lawmakers voted to charge a 3 percent management fee on some State Fund investments. The fee, on investments of over $1 billion made with the Montana Board of Investments, is expected to bring in $30 million to boost lagging state revenues. In imposing the fee, legislators dictated it could not be passed along to policyholders.

The State Fund tried to challenge the fee but eventually dropped that effort, though a group of policyholders has sued the State Fund and state of Montana in Helena District Court over the issue.


State Bureau reporter for The Independent Record.

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