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Disability benefit hike could cost Oregon $17 million a year

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An Oregon proposal that would increase workers compensation disability benefits could raise the state's workers comp system costs by $17 million annually, according to an analysis discussed Monday by the Oregon Department of Consumer and Business Services.

The analysis from the National Council on Compensation Insurance Inc. says that Oregon Legislative Concept 697 would increase permanent partial disability and maximum permanent total disability benefits from 100% of the state average weekly wage to 133% of the state average weekly wage. Meanwhile, the state's minimum PTD weekly benefit would increase to 33% of the state average weekly wage, up from the lesser of $50 or 90% of a worker's wage.

NCCI's analysis was posted online by the Oregon consumer services department as part of the agenda for a Monday meeting.

The legislative concept could be introduced as a bill during the Oregon legislation session, which begins on Feb. 1. Boca Raton, Florida-based NCCI said in the memo that L.C. 697 would raise Oregon's workers comp system costs by 2.5% if it is ultimately passed and enacted.

"Studies indicate that significant benefit increases are typically accompanied by changes in claimant behavior resulting in increased claim filings and an increase in the associated indemnity benefits," the analysis reads. "The cost impact of such behavioral changes is known as utilization. The changes proposed to impairment benefits in LC 697, however, are not expected to have a notable effect on claimant behavior and therefore no provision is included for utilization in this analysis."

Meanwhile, the Oregon Workers’ Compensation Division said in a bulletin that workers compensation premium assessments will increase to 6.8% for insurers and 7.0% for self-insured employers effective Jan. 1. The state’s workers comp assessment rate has been 6.2% for insurers and 6.4% for self-insured employers since 2013, the division said in the bulletin on Nov. 9.