Workers’ Compensation Rates to Decline in 2021

The Administration announced that Vermont businesses will see another rate decrease in workers’ compensation insurance in 2021. This is the fifth straight year workers’ compensation rates have decreased, and when combined with decreases from 2017-2020, Vermont employers will pay an average of 36% less in workers’ compensation premiums than they did in 2016.

In the voluntary market – which is the open competitive market – loss costs (the primary component of workers’ compensation rates) will decrease by an average of 5.5%. Approximately 90% of Vermont employers receive voluntary market coverage. In the assigned risk market – which is the market for employers unable to obtain coverage in the voluntary market – rates will also decrease by an average of 4.6%. The continued rate relief in the assigned risk market is particularly good news for new businesses who are often forced to obtain coverage in this market due to lack of claims history.

The new rates, approved by the Department of Financial Regulation, become effective on April 1, 2021.


The DFR has also issued several recent orders to help Vermont businesses with the significant challenges brought on by COVID-19. Specifically, the Department has:

  • Prevented businesses’ from experiencing a premium increase if they have a COVID-19 related workers’ compensation claim as any claims related to this once-in-a-century event would not accurately predict the safety of a workplace or the future claim costs for an employer;
  • Ordered premium relief for employers who paid furloughed employees during the pandemic since furloughed workers do not present workers’ compensation risk to the employer; and
  • Excluded any payments under the Front-Line Employees Hazard Pay Grant Program from being included in the calculation of premiums, thereby removing any financial barriers for employers to participate in the program and avoiding $2 million cumulative increase that would have otherwise occurred.

More details will be included in future posts, but if you have any questions about workers’ compensation rates, contact us at