Oregon Workers' Compensation Insurance

How to Buy Workers' Comp Insurance in Oregon

In September 2013, a crew from Stalcup Roofing and Construction was installing trusses on a new structure that was being erected just south of Sandy, OR. In a freak accident, several of the trusses suddenly toppled over. This caused four workers to fall, and approximately a dozen trusses fell on them.

Two of the workers suffered relatively minor injuries. They were transported via ambulance to a local hospital, where they were treated and released. Another worker, an 18-year-old man, had more serious injuries and was taken by a Life Flight helicopter to OHSU Hospital. There he was treated and released a couple of days later. The fourth man, a 33-year-old husband, father, and Iraq War veteran, was killed in the accident.

The owner of Stalcup Roofing was understandably devastated by this disaster, and his heart went out to the family of the employee who was killed. Fortunately, his company carried an Oregon workers’ compensation insurance policy. Therefore, the injured parties and their families did not suffer undue financial losses because of this tragic event.

What Are Oregon Workers' Compensation Laws?

Oregon workers’ compensation laws mandate that all employers must provide coverage against accidental injuries or illnesses that their workers may suffer on the job. Unlike many states that exclude companies with only one or two workers, this law applies to ALL employers in the state, even if they employ only one part-time worker.

There are exceptions. About 30 specific occupations do not need to be covered by Oregon workers’ compensation insurance. The following are some of the more common “non-subject” employees who do not need to be covered:

  • Domestic workers in a private home (this includes home health workers)
  • Workers employed to do gardening, maintenance, repair, remodeling, and other similar jobs in the private residence of the person who is paying the worker
  • Casual employees who are paid less than $500 in any 30-day period and who are providing services outside the normal trade, business, or profession of the hiring party
  • Workers engaged in interstate commerce
  • Sole proprietors

You can get a full list of exceptions through the Workers' Compensation Division of Oregon, or you can discuss your situation with a knowledgeable insurance agent who can provide you with guidance.

The Basics of Oregon Workers’ Compensation

What Does Oregon Workmans' Comp Cover?

Workers’ compensation insurance, also called workmans' comp, is designed to cover medical treatment for injuries and illnesses suffered on the job. It also covers lost wages for employees who need to take time off to recuperate, future medical costs for illnesses and injuries that require long-term care, and disability and lost wages for significant injuries that render the employee unable to work.

Fatal workplace injuries, such as the one that occurred outside of Sandy, can also result in death benefits being paid out to family members. Not all work-related fatalities are the result of accidents. They can also occur because of workplace violence or criminal acts by third-party actors. Regardless of how the incidents occur, if workers are killed in the course of doing their jobs, their families are entitled to fair monetary compensation. Workers' compensation insurance is designed to provide this coverage.

Sometimes claims can be denied, such as if the injured employee was acting under the influence of drugs or alcohol or if it is determined that the injuries were willfully self-inflicted. If an employee’s claim is denied, they have the right to appeal this decision to the Oregon Workers’ Compensation Board. This must be done within 60 days of the denial of coverage.

Who Is Covered?

Oregon offers some of the best low-priced workers’ compensation policies in the country, and this benefits both employees and employers in this state. Unlike most other states, Oregon has neither reduced employee benefits nor made any major reforms to its workers' compensation program since 2002. Even so, rates for coverage in this state have been steadily decreasing and are well below the national average.

Employees benefit from knowing that they will receive adequate compensation for losses related to occupational illnesses and injuries. These benefits are typically made available in a timely manner and do not require employees to seek legal assistance.

Employers also benefit from knowing that they are not likely to be sued for negligence related to these occupational injuries or illnesses, because when employees accept workers’ compensation benefits, they forfeit their right to sue their employers for their injuries. Such lawsuits can sometimes result in judgements exceeding a million dollars.

Where Can You Buy Oregon Workers' Compensation Insurance? 

In Oregon, employers can obtain workers’ compensation insurance coverage in one of two ways.

  • Purchase it on the private market: You can buy your coverage from any insurance company that is license to write a policy in the state. This is the most cost-effective way to get this mandatory insurance.

  • Purchase it through the state fund: Oregon maintains a state fund that can cover employers who are unable to acquire coverage on the private market. While the rates are generally higher, companies that are high-risk or cannot obtain private coverage for any other reason will be able to purchase coverage through this fund.

How Much Does Oregon Workmans' Comp Cost?

In Oregon, high and low rates for workers’ compensation are set by the Oregon Workers’ Compensation Division, and this division reports to the Department of Consumer and Business Services. Your quote for coverage will be determined according to:

  • Posted rates for coverage of workers in your industry
  • Your company’s total annual payroll amount
  • Your company’s risk assessment, as indicated by your experience modification factor

Some industries are more expensive to insure than others. Because Oregon is an NCCI state, the industry classification codes and the risks associated with businesses in each classification come from the National Council on Compensation Insurance.

Oregon Workers’ Compensation 2016 Base Rate Examples

In Oregon, overall base rates for workers’ compensation insurance are 26% lower than the national average. This is good news for employers in the market to buy coverage.

Listed below are some sample base rates (rate per $100 of employer payroll) published by the Oregon Workers’ Compensation Division with oversight from the Department of Consumer and Business Services as of January ,1 2016. Remember, these rates are subject to change each year, though in this state, they have decreased by about 10% since 2012.

  • 0042 Landscaping: $4.50
  • 5183 Plumbing: $2.49
  • 5645 Residential Construction/Carpentry: $4.45
  • 8017 Retail Store: $0.93
  • 8810 Clerical: $0.11
  • 9014 Janitorial: $3.16

As you can see, it costs far more to insure workers in industries where work accidents are more likely and can have greater severity than it is to cover workers in low-risk jobs.

What Is an Experience Rating and How Does It Affect Your Costs?

In this state, many companies are assigned an experience modification factor, or experience mod. If your business is among them, your experience mod can significantly affect how much you pay for your worker's comp coverage.

Experience mod ratings provide an indication of how a company’s workers’ compensation claims compare to other businesses of similar size and industry. Frequent and severe worker injuries will increase your experience mod, while long periods wherein your company remains accident-free can decrease it. A higher experience mod will translate to higher premium rates and a low mod can earn you a discount on your cost for coverage.

Not every business qualifies to be experience-rated, and eligibility requirements vary by state. In Oregon, a workers’ compensation experience rating is mandatory for employers with either:

  • $5,000 in policy premium generated during the last year or last two years, or
  • $2,500 average policy premium generated for more than two years

If your business is experience-rated, your premiums will be calculated using the following formula:

  • (Base Rate) X (Total Annual Payroll) X (Experience Mod) = Premium

New companies start out with an experience mod of 1.0. In the state of Oregon, if you purchase an existing company, you will inherit the experience mod already assigned to it. If it is on the high end, you will need to establish a long history of safe practices to get it down where you want it.

  • A mod of 1.0 does not affect your rate: All new employers start out with a mod of 1.0.
  • A mod greater than 1.0 is a debit mod. Your mod will go up according to the frequency or severity of worker injuries, and your premiums will increase. 
  • A mod less than 1.0 is a credit mod. Every year you go without a worker injury, your mod will decrease, and your premiums will be discounted.

Listed below are some examples of how an experience modification rating can affect Oregon workers’ compensation premiums:

  • Base rate premium: $10,000 
  • Mod: 0.75 (this translates to a 25% premium credit)
  • Premium with mod credit applied: $7,500
  • Base rate premium: $10,000
  • Mod: 1.0 
  • Premium is not adjusted: $10,000
  • Premium: $10,000 
  • Mod: 1.25 (this translates to a 25% premium surcharge/debit)
  • Premium with mod debit applied: $12,500

The best method for keeping your workers’ compensation rates as low as possible is to controlling your business’s safety record through safe practices and training. This will keep your experience mod low so that you may be able to qualify for policy discounts. A good Oregon workmans' comp insurance company can assist you in this endeavor by providing resources related to employee safety. 

Get Help Securing an Oregon Workers’ Comp Policy

The Estacada-based Stalcup Roofing and Construction company was covered by an insurer that understands the risks faced by workers in the construction industry. Likewise, there are Oregon workmans' compensation providers who are especially well-suited to meet the demands of your particular business. Allow a Trusted Choice® independent insurance agent to help you find an insurance company that can provide both the coverage you need and the resources necessary to help you ensure the highest level of worker safety. Contact an agent near you to learn more.

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