Delaware Small Business Says Workers Comp Increase Too High


Dover, DE ( - The state's leading small business advocate today credited Insurance Commissioner Karen Weldon Stewart for having mitigated the impact of a hike in the rates paid by employers for Workers Compensation. But a double-digit increase still hits hard, the group said, and Lawmakers and the Governor should work on reforms to reduce the overall cost of the system.

“Small business was staring at a 43-percent increase and the Commissioner deserves credit for paring that back,” said Ellen Valentino, Delaware State Director for the National Federation of Independent Business (NFIB). “But the rates are still going up by nearly 20 percent for a lot of small businesses and in this economy that's a jarring blow.”
Workers Compensation is the state-run insurance system that compensates employees who are temporarily disabled by injuries. Employers pay taxes for each of their workers to finance the benefits. A state board recently proposed a rate increase of 43.5 percent for the residual market and an increase of 38.3 percent for the voluntary loss market. After a comprehensive review, Commissioner Stewart approved increases of 19 percent and 14.6 percent, respectively.
“She softened the impact, but it's still a double-digit increase. That's a heavy blow for small businesses in Delaware,” said Valentino.
Valentino said lawmakers should consider ways to contain costs, such as a requirement that beneficiaries get generic drugs when appropriate instead of the top-shelf, highly expensive brand names. Legal reforms to cut down on workers comp-related lawsuits would also go a long way to reducing the burden on employers.
“We have to strike a balance that protects workers who have legitimate claims but which also doesn't force small businesses to finance the inefficiencies in the system,” she said.
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