The Montana State Fund Board of Directors approved Friday an 8.6 percent average reduction of workers’ compensation premium rates for about 25,000 employers the fund covers.
Friday’s reduction, which comes nearly a year to the day after an 8 percent reduction for fiscal 2019, marks 13 consecutive years of stable or declining rates, according to state fund spokesman Ethan Heverly. In a Friday press release, Heverly said current rates are the lowest in the state fund’s nearly three-decade history and represent a 43 percent reduction from 2011.
“It’s a good trend that we’re experiencing right now,” said Laurence Hubbard, state fund president and CEO, who added that the fund’s rates have not increased since 2007. “That’s just a good reinforcement that workplace safety pays and the more that employers and workers take time to do the work safely, that you can see the direct results in reduced worker’s compensation costs.”
The reduction applies to policies effective between July 1, 2019, and the same date in 2020. As the 8.6 percent figure is an average reduction, the actual reduction for each worker varies by their industry’s losses.
Last year, according to the Oregon Department of Consumer and Business Services, Montana’s rates for fiscal 2018 tied Hawaii’s for 13th-highest in the nation. The organization found Montana’s rates the highest in the nation as recently as 2010.
State Auditor Matt Rosendale called the 8.6 percent reduction “a credit to the improved safety record of Montana’s businesses and the policies that we have put forward” in his own Friday press release.
“Any decrease in work comp insurance rates is good for Montana’s small businesses, so I’m happy to see rates continuing to decline,” the release quoted Rosendale.
In the release, Rosendale lamented that the reduction could have been larger if not for $28 million diverted from the state fund to address a budget shortfall.
During the November 2017 special session called to address a $227 million shortfall, the Montana Legislature approved a 3 percent management fee on state fund investments with the state Board of Investments totaling $1 billion or more. The fee was forecast to raise about $30 million through the bill’s June 30 termination date.