Workers’ compensation pure premium rate to drop for 13th-straight year

On average, Oregon employers will pay less for workers’ compensation coverage in 2026, the Oregon Department of Consumer and Business Services (DCBS) announced today. The decline in costs marks 13 years of average decreases in the pure premium rate – the base rate insurers use to determine how much employers must pay for medical costs and lost wages.

Underpinning the cost decreases is the success of Oregon’s workers’ compensation system, which includes programs to control costs and encourage early return to work, maintain good worker benefits, ensure employers carry insurance for their workers, resolve disputes, and improve workplace safety and health.

The numbers illustrate positive, long-term trends, including:

• Employers, on average, would pay 87 cents per $100 of payroll for workers’ compensation costs in 2026, down from 91 cents in 2025, under a proposal by DCBS. That figure is referred to as loaded pure premium and covers workers’ compensation claims costs, assessments, and insurer profit and expenses.
• The pure premium rate would drop by an average 3.3 percent under the proposal. In fact, the pure premium per $100 of payroll will have declined by 46.5 percent from 2017 to 2026.

The reduction in costs is due to fewer claims entering the system over time, along with claims being generally less severe, according to the National Council on Compensation Insurance (NCCI). NCCI is the U.S. rate-setting organization whose recommendation DCBS reviews as part of its annual public process to decide rates.

Employers’ total cost for workers’ compensation insurance includes the pure premium and insurer profit and expenses, plus the premium assessment. Employers also pay at least half of the Workers’ Benefit Fund assessment, which is a cents-per-hour-worked rate.

The decrease in the pure premium of 3.3 percent is an average, so an individual employer may see a larger or smaller decrease, no change, or even an increase, depending on the employer’s own industry, claims experience, and payroll. Also, the pure premium does not consider the varying expenses and profit of insurers or modifications based on policyholders’ claim experience.

The stability of Oregon’s workers’ compensation system helps sustain the trend in lower costs. The system includes the Workers’ Compensation Division; Oregon OSHA; the Workers’ Compensation Board, which resolves disputes over the state’s workers’ compensation and workplace safety laws; the Ombuds Office for Oregon Workers, an independent advocate for workers on workers’ compensation and workplace safety and health; and the Small Business Ombudsman, an independent advocate for small business owners on workers’ compensation.

The premium assessment funds those successful programs.

The premium assessment, which is a percentage of the workers’ compensation insurance premium employers pay, is added to the premium. It would remain at 9.8 percent in 2026, the same as 2025, under the DCBS proposal. In fact, 2026 would mark the fifth-straight year the premium assessment remained at 9.8 percent.

“The continued decline in workers’ compensation costs shows the resiliency in making Oregon a safe place for workers,” said Sean O’Day, interim DCBS director. “That resiliency allows for good benefits for workers and reduced costs for employers.”

Meanwhile, the Workers’ Benefit Fund assessment funds return-to-work programs, provides increased benefits over time for workers who are permanently and totally disabled, and gives benefits to families of workers who die from workplace injuries or diseases.

The fund’s revenue comes from a cents-per-hour-worked assessment. The assessment would lower to 1.8 cents per hour worked in 2026. It would be the lowest rate since the inception of the cents-per-hour assessment in 1996.

The decrease in the pure premium will be effective Jan. 1, 2026, but employers will see the changes when they renew their policies in 2026.

Oregon’s workers’ compensation premium rates have ranked favorably compared to other states for many years. Oregon had the nation’s 14th least expensive rates in 2024, according to a nationally recognized biennial study conducted by DCBS.

The public hearings for the workers’ compensation assessment and the Workers’ Benefit Fund assessment are Thursday, Sept. 18, at 3 p.m. and 4 p.m., respectively.

Written testimony will be accepted through 5 p.m. Thursday, Sept. 25, by the Director's Office of the Department of Consumer and Business Services, P.O. Box 14480, Salem, OR 97309-0405.

The following cost chart summarizes the changes:

https://www.oregon.gov/DCBS/reports/cost/Documents/wc-summary.pdf

More information about Oregon workers’ compensation costs is at https://www.oregon.gov/DCBS/cost/Pages/index.aspx.

The loaded pure premium includes insurer costs, known as expense loading factors. Historic figures are adjusted to reflect the 2025 mix of employment and payroll.