No. 33064 (Amendment): Section R612-4-2. Premium Rates for the Uninsured Employers' Fund and the Employers' Reinsurance Fund

(Amendment)

DAR File No.: 33064
Filed: 10/15/2009 01:00:18 PM

RULE ANALYSIS

Purpose of the rule or reason for the change:

Workers' compensation insurance premiums in Utah include an assessment to fund the Employers' Reinsurance Fund (ERF) and the Uninsured Employers Fund (UEF). Employers that self-insure their workers' compensation liabilities are required to pay an equivalent assessment. Based on actuarial projections, current assessment rates will generate more income than is necessary to fund the ERF and UEF. The proposed rule therefore reduces the assessment rates.

Summary of the rule or change:

The proposed amendment lowers that portion of the workers' compensation insurance premium assessment used to fund the ERF from 5% for 2009 to 3.5% for 2010, and the portion used to fund the UEF from 0.25% to 0.05%. The amendment also removes an unnecessary reference to the assessment for the Workplace Safety Account.

State statutory or constitutional authorization for this rule:

• Subsection 59-9-101(2)
• Section 59-9-101.3
• Section 34A-2-202

Anticipated cost or savings to:

the state budget:

The proposed amendment is expected to reduce the state's expense for workers' compensation insurance by 1.7% from what that expense would be if the proposed amendment were not adopted.

local governments:

The proposed amendment is expected to reduce local government expense for workers' compensation insurance by 1.7% from what such expense would be if the proposed amendment were not adopted.

small businesses:

The proposed amendment is expected to reduce small businesses' expense for workers' compensation insurance by 1.7% from what such expense would be if the proposed amendment were not adopted.

persons other than small businesses, businesses, or local governmental entities:

The proposed amendment is expected to reduce expense for workers' compensation insurance by 1.7% from what such expense would be if the proposed amendment were not adopted.

Compliance costs for affected persons:

By reducing the overall premium assessment rate, the proposed amendment will lower workers' compensation costs for employers. The amendment imposes no compliance costs on any affected person.

Comments by the department head on the fiscal impact the rule may have on businesses:

By reducing the ERF and UEF assessment rates, businesses will enjoy a reduction in workers' compensation coverage costs. This reduction in one component of business costs will have a positive fiscal impact on businesses.

Sherrie Hayashi, Commissioner

The full text of this rule may be inspected, during regular business hours, at the Division of Administrative Rules, or at:

Labor Commission
Industrial Accidents
160 E 300 S
SALT LAKE CITY, UT 84111-2316

Direct questions regarding this rule to:

• Larry Bunkall at the above address, by phone at 801-530-6988, by FAX at 801-530-6844, or by Internet E-mail at [e-mail]

Interested persons may present their views on this rule by submitting written comments to the address above no later than 5:00 p.m. on:

12/01/2009

This rule may become effective on:

01/01/2010

Authorized by:

Sherrie Hayashi, Commissioner

RULE TEXT

R612. Labor Commission, Industrial Accidents.

R612-4. Premium Rates.

R612-4-2. Premium Rates for the Uninsured Employers' Fund and the Employers' Reinsurance Fund.

A. Pursuant to Section 59-9-101(2), Section 59-9-101.3 and 34A-2-202 the workers' compensation premium rates effective January 1, 2009, as established by the Labor Commission, shall be:

1. [0.25%]0.05% for the Uninsured Employers' Fund;

2. [5.00%]3.5% for the Employers' Reinsurance Fund;[

3. 0.25% for the workplace safety account.]

B. The premium rates are a percentage of the total workers' compensation insurance premium income as detailed in Section 59-9-101(2)(a).

 

KEY: workers' compensation, rates

Date of Enactment or Last Substantive Amendment: [January 1, ]2009

Notice of Continuation: January 12, 2006

Authorizing, and Implemented or Interpreted Law: 59-9-101(2)

 

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