Tennessee is cutting what employers pay for workers’ compensation insurance again next year as reforms rolled out for the injured employee program seven years ago continue to cut program costs.
The Tennessee Department of Commerce and Insurance announced Tuesday that it will reduce average workers’ compensation insurance premiums for the ninth consecutive year, adding another 5.6% savings from lower loss costs in the past year.
Although employer-specific premiums are based on the type of work done by employees and their track record of worker injuries, most employers should pay less next year. Since 2014, when Tennessee moved the state’s workers’ compensation claims process from a tort system to an administrative one, injured workers usually get benefits quicker but no longer may use attorneys in court to challenge decisions on their claims.
Insurers and employers complained in the past that the judicial appeal process led to unpredictable, inconsistent and more favorable rulings for injured workers from courts than the administrative claims process used today.
“We have a lot of members who have seen their rates go down anywhere from 20 to 80% over the last five or six years, and that’s what we were hoping for when these reforms were adopted in 2013 and implemented in 2014,” said Jim Brown, the Tennessee state director for the National Federation of Independent Business. “Under the old workers comp system, we had businesses that were contemplating leaving the state, but now we’re seeing businesses like Southern Champion Tray and McKee Foods expanding here.”