PA hikes Workers Compensation rates after Protz Decision

The Pennsylvania Department of Insurance hiked the workers compensation insurance premium for the second time within a year.  The Department of Insurance already hiked rates 6.6% that went into effect on February 1, 2018.  This second hike will increase premiums by .7% to go into effect on April 1, 2018.

Both jumps follow a state Supreme Court ruling last summer invalidating a portion of the state’s workers’ comp law, a move that some expect to result in higher costs for employers.  The ruling barred the use of so-called impairment rating evaluations, or IREs. The evaluations allowed companies to cap costs for paying out wages lost due to injury, typically in cases where workers could not return to work.

Lawmakers have introduced legislation to restore use of IREs. But it has not moved.

Workers’ comp rates typically are adjusted once a year. But after the court ruling, the rating bureau took the rare step of asking for an interim increase, which is the 6.06 percent hike that took effect this month.

The Department of Insurance increased the rates twice within a year for the first time in 25 years due tot he PA Supreme Court’s Protz v. WCAB, which invalidated Impairment Rating (IRE) provisions of the PA Workers Compensation Act.  The IRE provision served as an avenue for Employers and Insurance Carriers to limit benefits.  You can read more about the Protz decision here.