Workers’ compensation continues to be an important part of protecting employees and managing business risk. For employers in Massachusetts, Vermont and throughout New England, changing premium trends, rising claim costs and workplace safety concerns make a proactive approach especially important.
Following workers’ compensation best practices can help reduce risk and support employees. It can also help businesses manage long-term insurance costs through injury prevention, prompt claim reporting and effective return-to-work programs.
The Dowd Snapshot: Key Takeaways
- The national workers’ compensation market remains relatively stable, but claim severity is increasing. The National Council on Compensation Insurance (NCCI) reported that lost-time claim frequency declined 2 percent in 2025 while medical and indemnity claim severity each increased 4 percent.
- Massachusetts and Vermont have different rating environments. Massachusetts regulators rejected a proposed 7.1 percent statewide average rate increase for July 2025, leaving existing rates in place. Vermont has experienced a longer-term pattern of reductions, including a 7.4 percent voluntary loss-cost decrease effective April 2025.
- Your own claims experience still matters. Payroll, employee classifications, claim history and experience rating can have a greater effect on an individual employer’s premium than a statewide headline rate change.
- Prevention and return to work should be part of the same strategy. Identifying hazards before an injury occurs, reporting claims promptly and providing medically appropriate transitional work can help control both the frequency and cost of workplace injuries.
What Is Changing in the Workers’ Compensation Market?
At the national level, workers’ compensation continues to be one of the more stable property and casualty insurance lines. NCCI reported a 91 percent calendar-year combined ratio for 2025 and a slight 0.2 percent decline in net written premium. At the same time, lost-time claim frequency declined more slowly than its long-term average while both medical and indemnity claim severity increased 4 percent.
That combination deserves attention from employers. Fewer claims are generally positive, but the claims that do occur may become more expensive because of higher medical expenses, wage growth and other cost pressures. NCCI continues to monitor medical price inflation specifically because medical costs are an important component of workers’ compensation losses.
For an individual employer, this means loss prevention remains valuable even when the broader insurance market is favorable. Avoiding a serious injury can have an impact well beyond the immediate claim payment, including lost productivity, overtime, training costs and disruption to operations.
Workers’ Compensation Premium Trends in Massachusetts
Massachusetts provides a useful example of why employers should distinguish between proposed rate changes and actual approved rates. The Workers’ Compensation Rating and Inspection Bureau of Massachusetts sought a 7.1 percent statewide average increase effective July 1, 2025. The Massachusetts Commissioner of Insurance rejected that filing, so the rates and rating values already in effect remained unchanged.
That does not mean every Massachusetts employer’s premium stayed the same. Workers’ compensation premiums are affected by several company-specific factors, including payroll, employee classification codes, the type of work being performed and applicable experience or merit rating.
Massachusetts employers also have broad coverage obligations. The Massachusetts Department of Industrial Accidents states that employers operating in the Commonwealth generally must carry workers’ compensation insurance regardless of the number of employees or hours worked, subject to specific statutory exceptions.
Employers can review current requirements through the Massachusetts Department of Industrial Accidents.
Workers’ Compensation Premium Trends in Vermont
Vermont has experienced a different recent trend. Effective April 1, 2025, the state approved an overall 7.4 percent reduction in voluntary workers’ compensation loss costs and an 11.3 percent decrease in overall assigned-risk rates. The Vermont Department of Financial Regulation now publishes 2026 advisory loss costs, assigned-risk rates and carrier loss-cost multiplier information.
A loss-cost reduction should not be interpreted as a guaranteed premium reduction for every employer. Advisory loss costs are one part of the pricing process. An individual business’s payroll, classifications, experience modification and insurer pricing can still move the final premium up or down.
The Vermont Department of Financial Regulation provides current rating information through its workers’ compensation resources.
Why Can a Premium Increase When Workers’ Compensation Rates Do Not?
This is one of the most common questions employers ask.
A workers’ compensation premium is not determined by a single statewide rate. An employer that adds employees, increases wages, expands into higher-risk operations or develops an unfavorable claims history may pay more even when base rates are flat or declining.
Classification accuracy is especially important. Office employees, contractors, manufacturing employees and drivers may present very different risks. As operations evolve, employers should make sure their classifications continue to reflect the work employees actually perform.
Claims history matters as well. Massachusetts maintains experience and merit rating mechanisms that can reflect an employer’s past loss activity in pricing. For eligible smaller Massachusetts risks, for example, the state’s Merit Rating Program can provide a credit for no lost-time claims or a debit for multiple lost-time claims during the applicable experience period.
The lesson is straightforward: employers generally have more influence over their workers’ compensation costs than the annual statewide rate announcement might suggest.
Workers’ Compensation Best Practices for Reducing Claims
Businesses can reduce workers’ compensation claims by:
- Identifying hazards before injuries occur
- Involving employees in safety efforts
- Providing job-specific training
- Encouraging prompt reporting of hazards and near misses
- Reviewing incidents for root causes
A written safety program works best when it becomes part of everyday operations rather than a document reviewed only after an accident.
OSHA recommends a proactive safety and health management approach built around management leadership, employee participation, hazard identification, prevention, training and continuous improvement. OSHA notes that effective programs can prevent injuries and illnesses while reducing associated workers’ compensation costs.
Employers should also make near-miss reporting easy. A near miss provides an opportunity to correct a hazard without first experiencing an employee injury. When supervisors treat these reports as useful information rather than criticism, employers can often identify patterns earlier.
OSHA offers additional guidance through its Recommended Practices for Safety and Health Programs.
Build a Workplace Injury Policy Employees Understand
A clear workplace injury policy can reduce confusion at precisely the moment when an employee and supervisor need a quick response.
The policy should explain:
- How an injury is reported
- Whom employees should contact
- How medical attention is obtained
- How supervisors document an incident
Employers should also establish procedures for notifying their insurer and maintaining communication with an injured employee.
Prompt reporting matters because delays can make it harder to investigate what happened, coordinate medical care and begin the claims process efficiently.
Reporting requirements differ by jurisdiction, so multistate New England employers should avoid relying on a single procedure without checking state requirements. Vermont, for example, provides specific employer guidance on reporting workplace injuries through its Workers’ Compensation Division.
Make Return to Work Part of the Plan Before an Injury Happens
A return-to-work program should be created before an employee is injured.
The goal is not to rush someone back to full duty. The goal is to provide safe, productive work that complies with medical restrictions while the employee recovers. A good program begins with accurate job descriptions that document the physical demands of each position. Employers can then identify possible transitional duties in advance rather than searching for an assignment after an injury occurs.
Modified work could involve adjusted hours, reduced lifting, temporary administrative responsibilities, training assignments or another appropriate duty that fits within the employee’s restrictions. Communication among the employee, employer, medical provider, claims professional and other appropriate parties is critical.
Vermont’s Department of Labor specifically identifies returning injured employees to work as an employer workers’ compensation resource and emphasizes the value of planning for return to work.
Massachusetts also recognizes vocational rehabilitation and return-to-work assistance within its workers’ compensation system.
Review the Cause of Every Injury, Not Just the Claim
After an injury, employers should look beyond the immediate event.
If an employee slips, asking only whether the employee followed procedure may miss the underlying problem. Was lighting inadequate? Was housekeeping inconsistent? Was drainage poor? Was the work being rushed because of staffing levels? Had employees previously reported the hazard? A root-cause review can identify changes that prevent a similar injury from happening to someone else.
The same approach should be applied to recurring minor injuries. Several small strains, cuts or near misses in one department may indicate an ergonomic problem, equipment issue or training gap before a more serious loss develops.
Make Safety an Ongoing Management Responsibility
Effective safety programs need visible support from management.
OSHA encourages employers to make safety a core organizational value, involve workers in inspections and hazard identification, provide appropriate training and regularly evaluate whether controls are working.
Vermont employers can also use resources from the Vermont Occupational Safety and Health Administration (VOSHA), which identifies injury prevention as a first line of defense against rising workers’ compensation costs. For Massachusetts employers, the Department of Industrial Accidents maintains employer information on workers’ compensation requirements, injury reporting and claims administration.
For businesses with operations in both states, consistency is useful, but state-specific requirements still need to be incorporated into the company’s procedures.
What Should Employers Review Before Their Next Renewal?
Begin with the basics: confirm estimated payroll and employee classifications, then review open claims and recent loss runs with your insurance professional. Look for unresolved claims that may need attention and determine whether your experience modification or merit rating reflects accurate information.
Next, review operational changes. A new location, new equipment, expanded delivery operation, acquisition or change in employee duties can affect workers’ compensation exposure. These changes are easier to address before renewal than during a year-end premium audit.
Finally, review your workplace injury policy and return-to-work procedures. Supervisors should know what happens immediately following an injury and employees should know how to report both injuries and unsafe conditions.
Insurance and safety management work best together. Coverage provides financial protection when a covered loss occurs. Risk management is intended to reduce how often those losses happen and how disruptive they become.
Taking a Proactive Approach to Workers’ Compensation
Workers’ compensation trends in Massachusetts and Vermont show why employers should look beyond a single premium number. The broader market may be stable, but increasing claim severity, changing payroll and an individual company’s loss experience can still affect costs.
We work with employers across Massachusetts, Vermont and New England to help businesses understand their workers’ compensation coverage, manage risk and make informed insurance decisions. Schedule an appointment to review your coverage and discuss strategies that support a safer workplace.
Frequently Asked Questions About Workers’ Compensation in Massachusetts and Vermont
Is Workers’ Compensation Insurance Required in Massachusetts?
Generally, yes. Massachusetts requires employers operating in the Commonwealth to carry workers’ compensation insurance for employees regardless of the number of employees or hours worked, with certain statutory exceptions.
Is Workers’ Compensation Insurance Required in Vermont?
Vermont also has broad workers’ compensation coverage requirements. Because employee, contractor and ownership classifications can affect obligations, employers should review their specific circumstances with their insurance professional and current Vermont Department of Labor guidance.
How Can Businesses Reduce Workers’ Compensation Claims?
Workers’ compensation best practices include proactive hazard identification, job-specific safety training and employee participation. Encourage prompt reporting of unsafe conditions and near misses, investigate the root causes of injuries and correct identified hazards. A well-designed return-to-work program can then help manage the duration and impact of a claim when an injury does occur.
Can a Return-to-Work Program Lower Workers’ Compensation Costs?
It can help. Appropriate transitional work may reduce time away from work while helping an employee remain connected to the workplace during recovery. Any return-to-work assignment should follow medical restrictions and be adjusted as the employee’s capabilities change.
Why Did My Workers’ Compensation Premium Increase if State Rates Did Not?
Your premium can change because of payroll growth, employee classifications, your claims history, experience modification, insurer pricing or changes in business operations. Statewide rate movements are only one component of the final premium.
How Often Should We Review Our Workplace Injury Policy?
At least annually is a useful starting point, but employers should also review it whenever operations change or a significant injury reveals a gap in current procedures.