5 Must Know Workers’ Compensation Regulations Coming in 2025

With the end of the year quickly approaching here are some of the most important trends, regulations, and laws being introduced as of January 2025.

Regulations to Expect in Workers’ Comp 2025

The Florida Chamber of Commerce and the National Council on Compensation Insurance (NCCI) recently reviewed a proposed 1% decrease in Florida’s workers’ compensation insurance rates for 2025. If approved, this marks a cumulative 78% reduction since the landmark reforms of 2003. The decrease is driven by fewer and less severe claims, thanks to improved workplace safety measures and technology that reduces injuries and helps employees return to work faster.

However, the savings are slightly offset by SB 362, which increased reimbursement rates for physician services in 2024. The proposed rates will be finalized after the Office of Insurance Regulation (OIR) reviews them, with new rates taking effect on January 1, 2025.

Lower rates mean cost savings for businesses while maintaining safety standards. It’s a win-win: safer workplaces for employees and reduced insurance costs for employers.

Medical Treatment Under the Workers’ Compensation Law

Starting January 1, 2025, updates to Florida’s Workers’ Compensation law will increase reimbursement rates for medical and expert services:

Higher Medical Reimbursements:

• Doctors will now be reimbursed up to 175% of Medicare rates (previously 110%).
• Surgical procedures will be reimbursed up to 210% of Medicare rates (previously 140%).

Increased Expert Witness Fees:

• Experts providing medical testimony in workers’ comp cases will be paid up to $300 per hour (up from $200).
• For cases paid on a daily rate, the maximum increases to $300 per day (up from $200).

These changes ensure medical professionals and expert witnesses are better compensated for their roles in workers’ compensation cases.

Higher reimbursements and 50% increase in fees will significantly impact Workers’ Comp costs in 2025.

Connecticut Workers’ Compensation Rates: What You Need to Know for 2025

Want to hear some good news for employers? Connecticut’s workers’ compensation rates will continue to decrease in 2025, marking the 11th consecutive year of rate reductions. Here’s a breakdown of the changes and what it could mean for your state:

Rate Decrease:

Voluntary Market Loss Costs: Decreasing by 6.1%.
Assigned Risk Plan Rates: Decreasing by 6.2%.

Savings Over Time: Employers have saved over $400 million in premiums due to a decade of consistent rate reductions, according to Insurance Commissioner Andrew N. Mais.
Effective Date: These rate changes take effect on January 1, 2025.

Reasons Behind the Decrease:

• Improved Claim Experience:
  • Declining frequency of workplace injuries.
  • Fewer lost-time claims in recent years.
• Long-Term Trends:
  • Continued reductions in both medical and indemnity loss ratios.
  • Moderate changes in claim severity while maintaining overall profitability in the workers’ comp system.

Industry-Specific Rate Changes

• Voluntary Market Loss Costs by Industry:
  • Manufacturing: -8.0%
  • Contracting: -6.9%
  • Office & Clerical: -5.6%
  • Goods & Services: -5.2%
  • Miscellaneous: -5.7%
• Assigned Risk Market Rates by Industry:
  • Manufacturing: -8.1%
  • Contracting: -7.0%
  • Office & Clerical: -5.7%
  • Goods & Services: -5.3%
  • Miscellaneous: -5.8%

Understanding the Assigned Risk Market

Employers benefit greatly from staying in the voluntary market by maintaining strong safety standards and reducing claims frequency.

Voluntary Market: Businesses qualify based on risk, often enjoying better rates and more flexibility.
Assigned Risk Market: A safety net for high-risk businesses, often at higher premiums and stricter conditions, ensuring compliance with state workers’ compensation laws.

• Employers unable to secure coverage in the voluntary market can apply for policies in the assigned risk market, which also benefits from reduced rates in 2025.
• These rates reflect lower expenses but include an increased differential for assigned risks.

Historical Trends

2024:

○ Voluntary Market: -9.8%
○ Assigned Risk Market: -10.5%

2023:

○ Voluntary Market: -3.0%
○ No change for Assigned Risk Market.

 2022:

○ Voluntary Market: -14.1%
○ Assigned Risk Market: -8.2%

NCCI reported a combined ratio of 86% for workers’ comp in 2023, reflecting strong underwriting profitability.

Lower workers’ compensation rates mean significant cost savings for businesses while reinforcing the importance of maintaining safe workplaces. Long-term declines in claim frequency and moderate severity changes are consistent across the U.S. The sustained decline in claims demonstrates how investments in safety and efficiency benefit both employers and employees.

For employers unable to secure coverage in the voluntary market, the assigned risk market offers an affordable alternative. Staying informed about these changes helps you manage your insurance costs and plan with confidence.

Texas Workers’ Compensation Market: Key Updates and Insights

The workers’ compensation market in Texas is thriving with steady growth and profitability. Here’s a breakdown of the most important points:

Market Overview

• Stable and Profitable:
  • According to the 2024 Workers’ Compensation Annual Report by the Insurance Council of Texas: Workers’ Compensation remains one of the most profitable insurance lines in Texas,
• National Ranking:
  • Texas holds the 4th largest workers’ compensation premium volume in the U.S., with $2.7 billion in direct written premiums in 2023.
  • Loss ratio: 39.98%, reflecting strong market health.

Healthcare Costs in Workers’ Compensation

• Certified Networks:

  • Texas has 26 certified networks providing healthcare services for workers’ comp claims.
  • Network claims typically have lower healthcare costs compared to non-network claims.

• Key Cost Insights:

  • Network claims include more pharmacy expenses (27%) than non-network claims (24%).
  • Non-network claims involve more hospital services (29%) compared to network claims (25%).
  • Prompt treatment matters: Injured employees treated within 7 days had median medical costs of $629.
  • Waiting 8+ days increased costs to $798 (27% higher)

Challenges in Physician Availability

• Decline in Workers’ Comp Physicians:

  • The number of doctors specializing in workers’ comp care dropped by 4% from 2017 to 2022.
  • Claims handled per physician decreased by 7%, with 3% fewer new claims

•  Shift to Other Providers:

  • More patients are now being treated by physician assistants and advanced practice registered nurses.
  • 74% of workers’ comp physicians are located in Texas’s largest metro areas: Houston, Dallas, San Antonio, Austin, and Houston.
  • Legislative changes and initiatives by the Texas Department of Insurance, Division of Workers’ Compensation (TDI-DWC), are making it easier for physicians to participate in the system.
  • Between April 2023 and May 2024, 80 new designated doctors were added to the program.

Texas employers and workers benefit from a stable and efficient workers’ compensation market. Lower costs for network claims and prompt medical attention keep premiums in check while ensuring quality care for injured employees. Ongoing improvements in physician availability and care access continue to strengthen the system, making it easier for injured workers to recover and return to work quickly.

As adjusters and risk managers, you hold the keys to driving down costs, optimizing claims, and keeping businesses in the low-risk lane. Focusing on safety, smart claims management, and proactive strategies to stay in the voluntary market where premiums are lower, results in claims being smoother, and everyone wins.

As you head into 2025 with these insights, don’t stop at just a sneak peek—dig a little deeper! If you still have questions, reach out to the experts.

Eager for more? Check out our reputable sources:

Insurance Journal. (2024, November 21). Connecticut workers’ comp rates to decrease 6% in 2025. Retrieved from https://www.insurancejournal.com/news/east/2024/11/21/802099.htm

Insurance Journal. (2024, November 14). Texas workers’ compensation market stable and profitable: Annual report. Retrieved from https://www.insurancejournal.com/news/southcentral/2024/11/14/801213.htm

Insurance Journal. (2024, May 15). Workers’ comp industry profitable in 2023 with $48 billion in premiums: NCCI. Retrieved from https://www.insurancejournal.com/news/national/2024/05/15/774165.htm

National Council on Compensation Insurance (NCCI). (n.d.). Facts and information. Retrieved from https://www.ncci.com/Pages/AU_NCCIFactsAndInformation_Listing.aspx

Florida Chamber of Commerce. (n.d.). Political situation report. Retrieved November 25, 2024, from https://www.flchamber.com/political-situation-report/