Businesses operating on a calendar year typically spend the fall preparing for a new budget. As we approach the beginning of the fourth quarter, companies in Colorado might want to add a few percentage points to their budgets for workers’ compensation insurance.
As staff writer Beth Potter notes in this edition, higher medical costs and an increased number of claims mean that businesses in the state already have seen an average 3.7 percent increase in workers’ comp insurance rates. That followed several years of flat or falling rates.
The increases have been worse in some sectors. In Boulder County, for example, some industries have seen rates jump by 5 percent to 10 percent, Potter reports. For some companies with a substantial workforce, that means a sizable additional expense.
Exacerbating the problem statewide is the fact that, with a slower economy in recent years, fewer businesses exist to pay into the overall workers’ comp pool. That means that fewer businesses must carry the load, resulting in higher costs.
It’s lamentable that, as the economy shows signs of renewed life, businesses in the Boulder Valley and around the state must add a hefty increase to an expense line that has been stable for many years. Higher costs in this area mean that companies likely will hire fewer workers.
Businesses in Colorado had it pretty good for a decade, as Colorado enjoyed some of the lowest workers’ comp costs in the nation. For several years running, the state even saw hefty decreases in workers’ comp costs.
But times have changed. It’s best to face the facts and consult your insurance broker to determine what a realistic budget number will be.