Many employers in Connecticut will pay higher workers’ compensation insurance premiums starting Jan. 1, 2014.

The Connecticut Insurance Department has approved proposed rates for policies purchased in the normal, or voluntary, market that increase by 3.2% overall; and rates for assigned risk policies that will rise by 5.7%.

Costs for self-insured companies will likely increase as well, since their costs generally mirror those for insured businesses.

The rate changes were proposed by the National Council on Compensation Insurance Inc. (NCCI), which analyzes and recommends workers’ comp rates for insurers in more than 40 states.

Here’s how the rates break down by industry:

Voluntary Market

Manufacturing        + 3.7%                      

Contracting             + 3.5%                      

Office & Clerical       + 2.5%                      

Goods & Services     + 2.3%                      

Miscellaneous          + 5.2%                      

Overall  + 3.2%

Assigned Risk Market

Manufacturing + 6.2%

Contracting + 6.0%

Office & Clerical + 5.0%

Goods & Services + 4.7%

Miscellaneous + 7.7%

Overall  + 5.7%

According to NCCI, the primary drivers of the proposed changes are:

  • Average costs for both indemnity and medical care remain high and are growing faster than wages
  • The medical cost per case for lost time claims has increased dramatically over the last eight years

However, said NCCI, continuing declines in claim frequency have somewhat helped to offset rising costs.

The proposed rates are “pure premium” rates, which do not include costs associated with administration, premium taxes, and other expenses—nor do they take companies’ claims experience into consideration.

Rates will take effect for policies as they are purchased or renewed on or after Jan. 1, 2014.