The Vermont Department of Financial Regulation approved the revised workers’ compensation voluntary loss cost filing made by the National Council on Compensation Insurance—consisting of an overall 7.4% decrease. In addition, a decrease of 11.3% of the overall assigned risk rates was approved. These loss costs and rates will take effect Tuesday, April 1, 2025.
Key components
Components of the -7.4% loss cost reduction include changes in:
- Experience at -7.2%.
- Development at +2.1%.
- Trend at -2.8%.
- Benefits at +0.2%.
- All other at +0.3%.
Distribution
The overall voluntary loss cost change can be broken down by industry sector as follows: manufacturing (-3.5%); contracting (-7.2%); office and clerical (-8%); goods and services (-9.1%); and miscellaneous (-7.4%).
Keep in mind that the loss costs and rates for individual classifications may vary significantly. These are available to members by accessing Vermont 2025 workers’ compensation rates, loss costs and 2025 loss-cost multipliers.
Benefit change
The state average weekly wage is $1.175 effective July 1, 2024. Therefore, the maximum workers’ compensation indemnity benefit (150 % of SAWW) increases from $1,700 to $1,763 and the minimum workers’ compensation indemnity benefit (50% of SAWW) increases from $567 to $588 for injuries occurring on or after July 1, 2024.
Terrorism/catastrophe
The terrorism loss cost factor decreases from 0.005 to 0.001 and the terrorism assigned risk rate factor decreases from 0.01 to 0.001. The catastrophe (other than Certified Acts of Terrorism) loss cost factor and assigned risk rate factor also decrease from 0.01 to 0.001.
Maximum/minimum payroll
You will notice that the maximum payroll for executive officers and limited liability company members increases from $4,300 to $4,700, and the minimum payroll increases from $550 to $600. The premium basis for sole proprietors and partners increases from $27,800 to $30,600.
Split point
2015 was the third and final year of the split point transition period for experience rating. In each subsequent loss cost filing, the split point will be indexed by the countrywide severity change. For 2025, the split point increases from $18,500 to $21,000.
Loss cost multipliers
To convert voluntary lost costs to rates, the insurer’s loss cost multiplier must be applied. These LCMs are filed with the DFR and are changed periodically by individual insurers. However, these changes need not coincide with the loss costs approved April 1, 2025. The current list of insurer LCMs is located in Vermont 2025 workers’ compensation rates, loss costs and 2025 loss-cost multipliers.
Assigned risk plan
The 2025 assigned risk loss cost multiplier decreases to 1.362 from the 2024 multiplier of 1.421. The expense constant remains at $160 and the maximum minimum premium of $1,200 does not change. Also, the flat differential, which reflects the general experience of risks in this market, remains at 1.20%. The 2023 (most recent) market share in the Vermont plan was 7.8% (compared to 4.4% for all NCCI jurisdictions).
Dan Corbin, CPCU, CIC, LUTC
Dan Corbin joined the PIA team in 1992 and is the association’s director of research. His insurance background spans 45 years, with varied experience as agency owner, commercial service representative, producer, personal-lines manager and insurance specialist for a mortgage lender. Each year, he responds to approximately 800 technical inquiries from members. Dan is a member of the Chartered Property Casualty Underwriter Society and the Society of Certified Insurance Counselors. On Jan. 1, 2021, he became a contracted provider of membership services.
