Iowa Workers’ Comp Rate Reduction Revives Debate

Iowa’s governor and the organization that sets workers’ compensation rates are disputing whether a new law influenced a recent rate reduction in premiums for employers.

The National Council on Compensation Insurance announced an 8.7 average premium reduction for Iowa employers that will begin January 2018, The Des Moines Register reported.

Rep. Gov. Kim Reynolds said the decrease was a “direct result” of reforms that took effect in July, but council officials said the legislation played no part in the lower rates.

The governor released a statement last month saying that over the last decade, Iowa’s state’s workers’ compensation system “has mutated into one that benefits trial lawyers at the expense of businesses and workers.” Reynolds said recent reforms “rebalanced the scale to ensure employees are compensated fairly for being injured on the job while ensuring abuses are curtailed.”

The Legislative Services Agency said the legislation cuts benefits for injured workers, makes it more difficult for injured workers to claim lump sum payments and limits attorney legal fees.

But officials with the National Council on Compensation Insurance, which sets the rates in Iowa and other states in the US, said the reduction was based on data from premium years 2014 and 2015, along with a decrease in claims.

Questions regarding the governor’s statement were directed to the Iowa Insurance Division, which had reviewed the governor’s press release before it was issued.

Chance McElhaney, communications director and legislative liaison for the Iowa Insurance Division, said the governor’s press release incorrectly claimed the source of the reductions. However, McElhaney said state officials believe the legislation will create a positive environment that will continue to drive down rates in the future.

The impact of the law will be seen when workers who were injured in July after the law took effect begin to seek compensation, said Andrew Mertens, spokesman for the Iowa Association of Justice, which includes many attorneys who represent injured workers in compensation claims.

“This rate reduction is wrongly being used to justify the devastating workers’ compensation legislation last year,” Mertens said. “The governor’s office claimed that this was a direct result of the legislation that passed when the report clearly states the opposite.”