By Tim Maudsley
Alaskan businesses will receive a welcome drop in workers’ compensation rates for 2019, based on the expected approval by the Alaska Division of Insurance, which will go into effect on January 1, 2019. If approved, this will be the largest single reduction of rates seen in Alaska in the past 40 years. The 2019 rate reductions follow 2018 rates that fell 5.4 percent from 2017. Alaska has reduced rates by approximately 25 percent since 2015, thanks to continuing declines in claim frequency and favorable medical cost trends.
According to the State of Alaska, “the Division of Insurance is responsible for determining whether the reduced rates proposed by the National Council on Compensation Insurance (the organization in charge of filing workers’ compensation insurance rates in Alaska) are adequate. If approved, the new workers’ compensation rates will go into effect in January.”
“These proposed rate reductions are welcome news for Alaska businesses — lower workers’ compensation costs reduce the burden on the small businesses that strengthen our economy,” said Governor Bill Walker, who thanked “the Alaska State Legislature and the Department of Labor and Workforce Development for their work on payment reform, contributing to significant rate reductions for 2019.”
Alaska Daily News reported that, following approval by the Legislature in 2014, the Alaska Workers’ Compensation Board approved new practices and fee structures for paying medical providers for procedures paid for through workers’ compensation insurance in October 2015. The fee structure changes put provider reimbursement rates more in-line with general group health insurance rates, according to Workers’ Compensation Director Marie Marx. It replaced a system of paying medical service providers at the 90th percentile of “usual and customary” fees in a given region.
RISQ Consulting recommends looking at your current workers’ compensation placement, and review whether you are receiving the proper level of service from your insurer and risk management team. Given the market changes, now would be an optimal time to explore options available in the marketplace to improve your level of service as well as reduce your premiums.