WHAT ARE THE ADMINISTRATIVE FEES ADDED TO MY INSURANCE PREMIUM

Almost every workers' compensation policy incorporates an additional charge known as the Expense Constant. This fee is established by your state's insurance rating bureau and subsequently applied by the insurance carrier to your policy premium. The Expense Constant is a flat administrative fee designed to cover various operational costs associated with the policy, such as policy processing, underwriting, data management, filing necessary documentation, auditing, claims handling, billing, customer service, regulatory compliance, etc.

This expense does not vary depending on the size of your business, which means smaller businesses can pay the same Expense Constant as larger businesses. Depending on your state, charges can range from $100 to $350. This fixed rate is charged to every policy and is generally not negotiable.

So is it possible to save money from this fee?

• If you have multiple policies in multiple states, each policy will have its own Expense Constant. You could talk to your agent and see about having one policy (with one Expense Constant) with all the states you work in listed in the 3A section of your policy.

• When comparing different quotes, check the Expense Constant listed to see how it affects your total premium.

• Most cases, the fee is set; however, it's possible that a policy with minimal administrative needs could perhaps be negotiated. You would need to discuss it with your agent, but know your agent has no control over the Expense Constant. Again, these fees are decided by each state.

You can find information about Expense Constant specifics and much more by contacting your state's insurance rating bureau listed below:

ALABAMA Department of Labor Workers' Compensation Division

ALASKA Department of Labor & Workforce Development

ARIZONA Industrial Commission of Arizona

ARKANSAS Arkansas Workers' Compensation Commission

CALIFORNIA Department of Industrial Relations Division of Workers' Compensation

COLORADO Department of Labor and Employment Division of Workers' Compensation

CONNECTICUT Workers' Compensation Commission

DELAWARE Department of Labor Division of Industrial Affairs Office of Workers' Compensation

DISTRICT OF COLUMBIA Department of Employment Services Labor Standards Bureau Office of Workers' Compensation

FLORIDA Department of Financial Services Division of Workers' Compensation

GEORGIA  Georgia State Board of Workers' Compensation

HAWAII Department of Labor and Industrial Relations Disability Compensation Division

IDAHO Industrial Commission

ILLINOIS  Illinois Workers' Compensation Commission

INDIANA Workers' Compensation Board of Indiana

IOWA Iowa Workforce Development Division of Workers' Compensation

KANSAS Department of Labor Division of Workers' Compensation

KENTUCKY Kentucky Labor Cabinet Department of Workers' Claims

LOUISIANA Louisiana Workforce Commission Office of Workers' Compensation

MAINE Workers' Compensation Board

MARYLAND Workers' Compensation Commission

MASSACHUSETTS Department of Industrial Accidents Department

MICHIGAN Department of Licensing and Regulatory Affairs Workers' Compensation

MINNESOTA Department of Labor and Industry Workers' Compensation Division

MISSISSIPPI Workers' Compensation Commission

MISSOURI Department of Labor and Industrial Relations Division of Workers' Compensation

MONTANA Department of Labor and Industry Employment Standards Division Workers' Compensation

NEBRASKA Workers' Compensation Court

NEVADA Department of Business & Industry Division of Industrial Relations

NEW HAMPSHIRE Workers' Compensation Division Department of Labor

NEW JERSEY Department of Labor and Workforce Development Division of Workers' Compensation

NEW MEXICO Workers' Compensation Administration

NEW YORK Workers' Compensation Board

NORTH CAROLINA Industrial Commission

NORTH DAKOTA Workforce Safety and Insurance

OHIO Bureau of Workers' Compensation

OKLAHOMA Workers' Compensation Court

OREGON Workers' Compensation Division

PENNSYLVANIA Bureau of Workers' Compensation Department of Labor and Industry

PUERTO RICO Industrial Commission

RHODE ISLAND Department of Labor & Training Division of Workers' Compensation

SOUTH CAROLINA Workers' Compensation Commission

SOUTH DAKOTA Department of Labor and Regulation Division of Labor & Management

TENNESSEE Department of Labor and Workforce Development Division of Workers' Compensation

TEXAS Department of Insurance Division of Workers' Compensation

UTAH Labor Commission Division of Industrial Accidents

VERMONT Department of Labor Workers' Compensation Division

VIRGINIA Workers' Compensation Commission

VIRGIN ISLANDS Department of Labor Workers' Compensation Administration

WASHINGTON Department of Labor and Industries Insurance Services Division

WEST VIRGINIA Office of the Insurance Commission

WISCONSIN Department of Workforce Development Workers' Compensation Division

WYOMING Department of Workforce Services Workers' Compensation Division

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Blog Written By: Chris Cain, CWCP | Host of Work Comp Chaos

ABOUT CHRIS

Current

• Host of Work Comp Chaos | licensed in multiple states as both an insurance adjuster & agent

• Vice President of The Southern Agency Insurance in charge of Operations and Claims

• United Heartland Insurance Company Claims Advisory Council

Speaking Events

• Altaworld Insurance Tech & Innovation Conference (upcoming): Q&A Discussion: Claims

• Stairbuilders & Manufacturers Association: Hidden Liabilities

• Georgia Public School Board Workers' Compensation Association: How To Handle Work Comp Claims

• Homebuilders of Atlanta: Claims and Warranties

• Lunch & Learn: Various Uses of Life Insurance - Key Man, Tax-Free Benefits, Buy-Sell Agreements

Prior

• State of Tennessee Telehealth Advisory Committee assisting in developing rules and statutes

• Utilization Review Advisory Committee

• Past President of the Tennessee State Claims Association

• Served 15 years as President of the Chattanooga Claims Association