Posted on May 17, 2014
The state of Montana traditionally has some of the highest workers compensation insurance rates in the country. In early 2011 the insurance commission approved a 5 percent decrease in rates based on recommendation of the National Council of Insurance (NCCI).
While the modest change in rates was a step in the right direction, the Montana government worked to change the system even more by bringing reform to the workers comp industry. Their first move was to pass a reform bill in March 2011 which advised an additional 22 percent decrease to base rates effective in July of that year. The decrease was not a straight percentage cut across the board. Instead, it was an average of different cuts made to various business classes. Some industries received greater decreases than others.
The primary legislative focus was to reduce liability for employers by changing some of the standards for filing claims. A few examples include that employees would no longer be able to file workers compensation claims for injuries that occurred during a work break or while participating in a social or recreational event.
Additionally, the reform allows for claims for benefits to be closed after 5 years with the ability to reopen subject to review by a medical panel. Other changes allow employees to choose their own medical provider with rates locked at 2010 levels. The potential savings on workers compensation costs were estimated to be between $84 and $183 million in the first year.
In the end, the insurance companies did not follow the NCCI's full recommendations. The Montana State Fund cut their rates by 20 percent in the hopes that other insurers would follow suit. Medical benefits will end 5 years from date of injury occurrence rather than from date of last treatment, and injured employees can renew benefits every 2 years with medical panel review. Fee schedules were implemented for permanent disability claims. The reform changes also prohibit benefits for employees injured while on work breaks off site.