- New York approved a 21.9% workers’ compensation loss cost reduction, effective October 1, 2026, with projected employer savings above $1 bn.
- The cut follows lower lost-time claim frequency over the past three years, though indemnity and medical claim costs continue to rise.
- New York remains one of the most expensive US workers’ compensation markets, despite steady rate decreases since 2020.
New York has approved a 21.9% reduction in workers’ compensation insurance premium rates, giving businesses an estimated saving of more than $1 bn. State officials put the average saving at $1,779 per employer.
The New York State Department of Financial Services approved the loss cost rate reduction. The change takes effect on October 1, 2026.
Workers’ compensation premium rates in New York have declined steadily since 2020. Approved rate decreases averaged 10.3% a year across the six-year period, according to state figures.
The latest reduction comes on top of a lower employer assessment rate for costs tied to the New York Compensation Insurance Rating Board. For calendar year 2026, the assessment rate stands at 7.0% of standard premium.
New York State Insurance Fund, the state’s largest workers’ compensation insurer, has also returned more than $700 mn to policyholders over the past year. The insurer distributed the money through dividends and discount programs.
State officials said the 22% loss cost rate reduction came partly from a lower frequency of lost-time claims over the past three years. Workplace safety efforts also contributed, according to the state.
The New York Compensation Insurance Rating Board analysis points to a more mixed pricing picture. Claim frequency decreased, but indemnity and medical claim costs kept trending upward. After factoring in claim severity, claim frequency and projected wages, the board selected a net future trend factor of -23.2%.
Benefit level changes moved in the other direction. Their combined effect added 2.4% to the overall rate change.
The average manual loss cost level is falling, though each class sees a different result. The board calculated increases and decreases from current loss costs for every class, so the final impact will differ by employer type and risk profile.
New York still entered the current cycle from a relatively expensive position. A biennial analysis by the Oregon Department of Consumer and Business Services found that New York had among the highest workers’ compensation rates in 2024. Hawaii ranked highest, followed by New Jersey, New York and California. North Dakota had the lowest rates.
Gov. Kathy Hochul proposed several workers’ compensation reforms in 2025 to improve access to the system. Several passed into law.
One provision allows resident and fellow physicians at teaching hospitals to treat workers’ compensation patients under faculty supervision.
Another allows insurers to pay for an injured worker’s medical care for up to one year without legally admitting liability, which reduces delays during claim review. A third allows eligible licensed healthcare providers to treat workers’ compensation patients without separate approval from the New York State Workers’ Compensation Board.
