FAIRBANKS - Employers in Alaska are bracing for the biggest hike in workers' compensation insurance rates since 1988.
The changes effective Jan. 1 could mean higher costs for goods and services for consumers.
Overall, workers' compensation insurance rates will rise more than 20 percent statewide. In comparison, the rates grew only 3.5 percent on average in 2003 and 10 percent the year before.
Between 1999 and 2000, Alaska workers' compensation rates decreased or remained the same.
Greg Durdik, owner of four Interior NAPA Auto Parts locations, said he will see the amount he pays for workers' compensation rise 27 percent. The change translates to an extra $40,000 he'll have to pay next year.
"That's a lot to me. I don't know about some people," said Durdik, who insures more than 70 employees.
Rising medical costs once masked by declining workers' compensation claims are catching up with the state, said Sarah McNair-Grove, an actuary for the Department of Community and Economic Development's Division of Insurance.
The National Council on Compensation Insurance, a rating organization licensed by the state to file workers' compensation rates on behalf of insurance companies, requested the increases, which were approved by the Division of Insurance.
Not all business owners said the new rates will affect consumers, but some price hikes may be inevitable.
"The bottom line is, the cost to the consumer is going to go up. So whether it's a hamburger or if you go to the bank or if you have an electrician come to your house, they're going to have to pass along the cost to do business," said Bernie Raven, senior vice president of Alaska National Insurance Co., one of the largest workers' compensation insurance providers in the state.
Rates vary by profession, so the cost to insure some workers will go up more than others.
© 2018. All Rights Reserved. | Contact Us