Lawmakers, insurers and labor experts debate raising workers' compensation indemnity from 60% to 66 2/3%

Representative Mackenzie introduced proposed changes to how workers' compensation indemnity is calculated — raising the indemnity rate from 60% of gross wages to 66 2/3% — and invited stakeholders to describe potential fiscal and administrative effects.

Nathan Bennesie, an attorney at Pretty Flaherty representing the National Council on Compensation Insurance (NCCI), said an NCCI analysis done in January estimated a near-term impact on voluntary market loss costs of “between plus 5% to plus 6.3%,” which he translated to about $12 million to $15 million in additional premium for 2025. Bennesie described how the calculation considered increases in indemnity utilization and broke the impact down by claim type: a 9.5% increase for permanent total indemnity, 11.9%–14.5% for permanent partial, and 12.8%–16.6% for temporary partial, producing an overall indemnity-driven uplift of roughly 12.2%–15.3% that, after weighting indemnity’s share of total cost, yielded the 5%–6.3% premium estimate. He said the analysis assumed the change would begin Jan. 1, 2026 and would not be retroactive.

Peter Bridal, representing the Lawson Group (a third-party administrator for self-insured funds), said self-insured employers prioritize preventing injuries and getting injured workers back to work quickly. “Our goal is to get people back to work, and help reduce those claims cost and keep people whole as well,” Bridal said, and added that self-insured groups spend a higher share of their budgets on loss control than typical commercial carriers.

Christian Sidorella, chief property and casualty actuary at the New Hampshire Insurance Department, described market structure and the residual market: roughly a hundred carriers write workers‑comp in the state, and the residual market covers a small share (under 6%) of employers who cannot obtain coverage in the voluntary market. Sidorella said voluntary and residual loss costs tend to move in parallel and confirmed the long‑term trend of falling loss costs across recent years.

Danielle Albert of the Department of Labor explained the department’s role and limits: the department regulates benefit payment and certifies self‑insured employers (reviewing actuarial studies and security), but does not set rates. Albert said the statute currently uses gross wages when computing average weekly wage and noted that the bill filed this session left gross wages in place. “Currently it is based off gross,” Albert said, adding that switching to a net (after‑tax) calculation would require amendments to other statutory sections (she referenced the statute governing average weekly wage) and likely complicate administration and delay payments because net wages are harder to obtain consistently from payroll records.

Albert also described how compensation rate changes would affect other benefits: indemnity changes can alter permanency awards and second‑injury fund reimbursements because those reimbursements are calculated in part from indemnity amounts; medical benefits are governed separately and would not be directly changed by an indemnity rate change.

Committee members pressed stakeholders on market context. NCCI and the Insurance Department both noted a multiyear decline in loss costs, driven by lower claim frequency, changes in reserve assumptions and lower‑than‑expected medical inflation; Bennesie and Sidorella provided year‑by‑year percentages showing decreases in recent filings. Stakeholders repeatedly flagged that the NCCI estimate covered the voluntary market only and excluded self‑insured portfolios, though bridal offered a high‑level estimate that self‑insured groups also expect higher indemnity costs and emphasized aggressive loss control.

No formal vote or amendment was recorded at the hearing. Lawmakers asked for further data breakdowns (by industry and claim duration) and for additional modeling of the proposed change’s effect on self‑insured groups, residual market carriers and employer premiums.

Ending: Committee members requested follow‑up analyses to compare scenarios (including gross vs. net wage bases and staged implementation dates) and signaled plans to invite additional stakeholders back for more detailed figures and industry‑specific breakdowns.