The study findings are generally released in summary form during the fall of each even-numbered year. A full report, including detailed data and notes on methodology, is released several months later. Oregon has been doing these studies in even-numbered years since 1986.
The Oregon Department of Consumer and Business Services surveys insurance regulators and workers’ compensation rating bureaus in each of the 50 states plus the District of Columbia for rate information, as of Jan. 1 of the study year.
Every state’s economy is different, which leads to a different mix of industries, occupations, and occupational hazards. We want to factor out this difference – in other words, create a standard industry mix for all states – so that we can see real differences in workers’ compensation rates. As a result, the index rate is a weighted average, using a consistent mix of 50 major risk classifications, across all states within each study. The weights used in the average are the most recent available Oregon payrolls for each class; thus the mix varies slightly from study to study.
Oregon’s industry mix is actually quite similar to the countrywide mix in the types of jobs that carry the largest weight in the study. For example, the top 10 risk classifications with the most payroll in our study are common in all states.
When rates in other states are generally declining, a state with smaller declines than others can see its relative rank go up. The study includes costs other than pure premium. The rates we use in the study also incorporate insurer expenses and state administrative assessments. These may go up and down, independent of pure premiums, so a state could see a drop in pure premium rates but an increase in insurer overhead, state administrative assessments, or both.
These factors apply to employers based on their individual characteristics, not to the state as a whole.
The available data are not consistent for all states. Even if an overall adjustment factor was available for those other factors, it would only be available several years later, making study results untimely.
States regulate self-insurers differently, and self-insurers don’t pay premiums, so their costs aren’t reported consistently across states. We focus on employers who are purchasing insurance, so we can treat them comparably.
An alternative measure is published in each study. That measure is each state’s index rate as a percentage of the median (middle) state in that year’s study. This can be more useful than the rankings alone. In recent years, rates have become more closely bunched, so small differences in the index rate may affect the ranking significantly. This makes it harder to track states over time. In the 2012 study, we reported 20 states within plus or minus 10 percent of the median, indicating a very tight grouping.