Why 2019 Rates Were Unique to Massachusetts
Massachusetts' 2019 workers' compensation rates were shaped by a combination of high claim frequency, rising medical costs, and regulatory changes that tightened premium calculation methods. Compared with neighboring New England states, the Commonwealth consistently posted the second‑highest average premium per employee in 2019, reflecting both the state's robust safety programs and its cost‑heavy healthcare market.
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Core Components of the 2019 Rate Formula
Rates were determined by the Massachusetts Department of Industrial Accidents (MDIA) using a multi‑factor model. The primary elements were:
- Industry classification – each SIC code carried a distinct base rate.
- Experience modification (Exp‑Mod) – a company's past claim history adjusted the base rate up or down.
- Payroll factor – total employee wages divided by the number of workers.
- Medical inflation index – a 2.4% annual increase applied to all rates in 2019.
Typical Rate Ranges by Industry
Below is a snapshot of the average annual premiums per employee for common Massachusetts sectors in 2019:
| Industry | Average Rate (USD/yr) | Key Cost Drivers |
|---|---|---|
| Manufacturing | 1,280 | High injury frequency; heavy equipment use |
| Construction | 1,150 | Falls, scaffolding incidents; project‑based payroll |
| Retail | 580 | Slips, trips; low injury severity |
| Healthcare | 860 | Patient handling; ergonomic issues |
| Technology | 420 | Low physical risk; higher benefit cost share |
Impact of Experience Modification
The Exp‑Mod factor could shift rates by up to ±30% in 2019. Companies with a clean claim record earned a 0.85 modifier, lowering their premium, while those with multiple claims faced modifiers above 1.20, increasing costs. Maintaining a strong safety program and timely claim reporting were essential to secure favorable modifiers.
Regulatory Changes that Influenced 2019 Rates
In early 2019, MDIA introduced a new "Safety Incentive Program" that offered premium credits for documented safety training and certification. Employers who met the program's thresholds received a 5% discount, offsetting some of the medical inflation impact. Additionally, the state tightened the reporting deadlines for claims, encouraging earlier settlements and reducing prolonged medical expenses.
Planning for 2020 and Beyond
While 2019 rates provide a historical benchmark, employers should monitor MDIA's annual updates. Key strategies include:
- Investing in preventive training to lower Exp‑Mods.
- Choosing carriers that participate in the Safety Incentive Program.
- Regularly reviewing payroll data to ensure accurate premium calculations.