New York Workers’ Compensation Insurance Premiums to Drop 22%
New York employers are set to benefit from an average 22% reduction in workers’ compensation insurance premiums, announced by Governor Kathy Hochul on July 15. This adjustment is projected to save businesses over $1 billion, equating to an average of $1,779 per policyholder. The New York State Department of Financial Services authorized the rate cut, scheduled to be effective from October 1, 2026. Since 2020, the state has consistently seen annual decreases in workers’ compensation rates, averaging 10.3% each year.
In addition to the rate cut, the New York State Insurance Fund (NYSIF) dispensed more than $700 million over the previous year through various dividend and discount initiatives. This included $698 million for over 100,000 employers involved in workers’ compensation safety groups and an additional $2.9 million to over 27,000 policyholders with disability benefits coverage.
The reduction in premiums is partially attributed to a drop in workers’ compensation lost time claims over the past three years, influenced by improved workplace safety measures such as the Warehouse Worker Protections Act. Furthermore, the reduction complements an earlier lowered employer assessment rate, which has decreased by 37.5% since 2021. This assessment is calculated based on the Workers’ Compensation Board’s statewide premium requirements and involves dividing the board’s estimated annual expenses by the projected statewide premium. Insurers include this rate in their premium calculations.
Modernization Initiatives and Telehealth Regulations
To enhance process efficiency, the Workers’ Compensation Board has initiated various modernization efforts. These include transitioning from paper to electronic submissions to expedite claim processing, consolidating medical billing forms into the single, standardized CMS-1500 form, and adopting permanent telehealth regulations. They have also streamlined the medical dispute resolution process, eliminating backlogs and facilitated electronic billing submissions to expedite provider payments.
DFS Acting Superintendent Kaitlin Asrow emphasized the department’s commitment to cost savings for New Yorkers, pivotal for the state’s economic contributors. NYSIF’s Executive Director and CEO, Gaurav Vasisht, noted that dividend and discount programs serve as incentives for employers who prioritize workplace safety. Assemblymember Harry B. Bronson highlighted that enhanced safety measures and flexible working environments have notably reduced expenses for businesses, particularly smaller enterprises.
This announcement aligns with broader initiatives to manage insurance costs in New York, including recent state budget reforms aimed at mitigating auto insurance premium drivers such as fraud and litigation. Earlier this month, DFS issued guidance to implement these reforms. Employers are encouraged to examine the approved workers’ compensation rates on the New York Compensation Insurance Rating Board’s website.