Next year, Minnesota will continue its streak of falling workers’ comp premium rates. Effective January 1, 2027, the average pure premium will decrease by 4.5%, per the Minnesota Workers' Compensation Insurers Association (MWCIA).

The MWCIA is the state’s “licensed and preferred Minnesota Data Service Organization (DSO)” which establishes the premium rate that insurers use as their baseline, subject to Department of Commerce approval.

Minnesota employers are not only enjoying the fruits of the national trend of falling premiums; as the Workers’ Compensation Research Institute (WCRI) points out, Minnesota is something of a pleasant anomaly, as medical costs remained flat through 2025, making it even more logical to further ease the burden of maintaining comp coverage.

The decrease is the fourth in a row for Minnesota, according to a report from the Minnesota Commerce Department.

As daisyNews will never stop pointing out until we hear a credible, data-backed explanation, California continues to buck the trend of cheaper comp coverage, with premiums up this year for the second time in a row. With the independent rating bureau responsible for proposing premium rates failing to fully substantiate the need for the increases, California employers should be barking mad.

Minnesota: Medical Costs Stay Flat, Premiums Keep Falling

Since 2017, Minnesota’s pure premium base rate has risen only twice, in 2019 and 2023. Otherwise, it’s been cut after cut, including a 10.3% nosedive in 2024. According to the state’s Department of Labor and Industry, rates dropped 44% overall between 2004 and 2026.

In the chart below tracking the percentage change in premium rates since 2017, the data show that the rate decreased eight times since 2017, with the ninth cut on the horizon for 2027.

The MWCIA is a non-profit corporation that produces an Annual Ratemaking Report, from which the state government sets the base premium rates that insurers use to calculate how much they charge employers for coverage.

With WCRI data indicating that medical costs have been holding steady, the financial outlook for insurers is positive.

Minnesota’s good news reflects the national trend of strong profitability in workers’ comp insurance, which state comp authorities have translated into lower premiums for employers in almost every state…with a few stubborn exceptions.

California’s Premium Problem Is a Data Problem

daisyNews has used every announcement of falling premiums as an opportunity to spotlight California’s oddball position as one of the few states where workers’ comp is becoming progressively more expensive, despite data indicating insurer profitability.

At the heart of the issue is the Workers’ Comp Insurance Rating Bureau (WCIRB)’s status as the rating bureau that officially proposes premium rate levels to the state government. While other states utilize independent rating bureaus, the WCIRB does not, in our opinion, adequately justify its requests for more of employers’ money.

Besides the opacity of the WCIRB’s reporting, which is based on unverifiable, insurer-supplied data, several factors warrant skepticism:

• The WCIRB neglects to factor in Preferred Provider Organization (PPO) discounts into its calculations of medical costs.
• Insurer representatives dominate the WCIRB’s Actuarial Committee, which informs the organization’s premium rate proposals, 7-1.
• According to credible industry experts, the WCIRB makes insurers appear less profitable by excluding key sources of income and failing to distinguish between for-profit private insurers and the State Compensation Insurance Fund, thereby justifying higher premiums than may be necessary.
• The WCIRB categorizes non-treatment expenses, such as Medical-Legal disputes, as “medical” costs, a common but arguably misleading approach.

Meanwhile, California providers face stingy reimbursement rates due to a combination of low fee schedules and abuse of network discount contracting. Insurers in California are spending twice the national median on administrative expenses and charging employers the fourth-highest rates in the nation.

Every state announcing a premium decrease is a painful reminder that California employers are paying more and more, and the reasons are far from clear.

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