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NCCI 2019 WC loss cost decrease of 5.1 percent approved

The Vermont Department of Financial Regulation approved the original workers’ compensation voluntary loss cost filing made by the National Council on Compensation Insurance, consisting of an overall 5.1 percent decrease. In addition, a decrease of 9.2 percent of the overall assigned risk rates was approved as filed. These loss costs and rates will take effect Monday, April 1, 2019.

The NCCI made the following key observations that impact loss costs and rates in Vermont:

  • There was a financial data experience improvement over the previous year.
  • Lost-time claim frequency decreased 2.2 percent in the latest complete year.
  • Medical and indemnity costs per case have stabilized.
  • The profit and contingency provision decreased due to the 2017 Tax Cuts and Jobs Act.

Key components

Components of the -5.1 percent loss cost reduction include changes in:

  • experience at -5.6 percent;
  • trend at 0.0 percent;
  • benefits at +0.3 percent; and
  • loss-based expenses at +0.2 percent.


The overall voluntary loss cost change can be broken down by industry sector as follows: manufacturing (-5.8 percent); contracting (-5.7 percent); office and clerical (-6 percent); goods and services (-4.7 percent); and miscellaneous (-4.3 percent). The loss costs and rates for individual classifications may vary significantly. These are available to members by accessing QS44007 in the PIA QuickSource library.

Benefit change

The state average weekly wage has risen from $854 to $874, effective July 1, 2018. Therefore, the maximum workers’ compensation indemnity benefit (150 percent of SAWW) has risen to $1,311, and the minimum workers’ compensation indemnity benefit (50 percent of SAWW) has risen to $437 for injuries occurring on or after July 1, 2018.


The terrorism loss cost remains at 0.005 and the terrorism assigned risk rate remains at 0.01. The catastrophe (other than Certified Acts of Terrorism) loss cost and assigned risk rate also remain at 0.01.

Maximum/minimum payroll

The maximum payroll for executive officers and limited liability company members increased from $3,400 to $3,500, but the minimum payroll remains at $850. The premium basis for sole proprietors and partners increases from $44,400 to $45,400.

Split point

2015 was the third and final year of the split point transition period for experience rating. In each subsequent loss cost filing, the split point will be indexed by the countrywide severity change. For 2019, the split point increases from $16,500 to $17,000.

Loss cost multipliers

In order to convert voluntary lost costs to rates, the insurer’s loss cost multiplier must be applied. These LCMs are filed with the DFR and are changed periodically by individual insurers. However, these changes need not coincide with the loss costs approved April 1, 2019. The current list of insurer LCMs is located in QS44007 in the PIA QuickSource library.

Assigned risk plan

The 2019 assigned risk loss cost multiplier decreases to 1.429 from the last year’s multiplier of 1.493. The expense constant remains at $160 and the maximum minimum premium of $1,200 does not change. Also, the flat differential, which reflects the general experience of risks in this market, remains at 1.20 percent. Market share in the plan has remained relatively stable, at 11.2 percent in 2016.