Minnesota Workers' Comp Premium Base Rates Decreased
Business owners in Minnesota should prepare for lower premium levels as the state's workers' compensation market sees rate softening.
Updated on Oct. 14, 2026 in Nursing Jobs
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Medical payments per workers' compensation claim in Minnesota remained stable throughout 2025. Following this trend, the Minnesota Workers' Compensation Insurers Association reported a 4.6% decrease in pure premium base rates for 2026.
Why it matters
The stabilization of medical costs, supported by 2023 hospital outpatient fee schedule updates, is driving downward pressure on insurance premiums. This shift creates a more favorable cost environment for employers managing mandatory coverage requirements.
Minnesota's average pure premium rate for 2026 is 44% lower than in 2004 and 34% lower than in 2016. However, indemnity severity rose 24% over the five years ending in 2026, offsetting some potential savings.
The players
Minnesota Workers' Compensation Insurers Association
An organization that develops and manages advisory pure premium rates for workers' compensation insurance in Minnesota.
Minnesota Workers' Compensation Assigned Risk Plan
A state-mandated program providing workers' compensation coverage for employers unable to obtain insurance in the private market.
The details
Insurers in Minnesota use advisory pure premiums from the state association as a foundation, though as an open-rating state, final costs vary by carrier. The recent stability in medical payments per claim is largely attributed to updates made to the hospital outpatient fee schedule in October 2023. While medical costs have leveled off, the concurrent 24% rise in indemnity severity highlights that businesses still face higher costs for individual non-medical claims.
Timeline
2004: Baseline year for premium rate comparison.
2016: Baseline year for premium rate comparison.
October 2023: Hospital outpatient fee schedule updates implemented.
2025: Medical payments per claim remained stable.
January 1, 2027: Premium reduction effective for assigned risk plan policies.
Market Landscape
This decline in premium rates follows a long-term trend of reduction since 2004, reflecting the state's managed approach to compensation costs. It underscores the ongoing influence of the Minnesota hospital outpatient fee schedule on overall market pricing.
Business owners should review their upcoming policy renewals to determine how these lower advisory rates translate to their specific carrier's pricing. Managers must also track indemnity severity trends, as rising non-medical costs may offset insurance premium savings.
The takeaway
The softening of workers' compensation premiums offers a rare opportunity for bottom-line relief in a tightening labor market. Operators should consult with their insurance broker to ensure their business is capturing the full benefit of the adjusted pure premium base rates.
What happens next
Premium reductions for the Minnesota Workers' Compensation Assigned Risk Plan are scheduled for policies effective January 1, 2027.
Further reading
Find more analysis on labor costs and local sector trends in Nursing Jobs.
Source note: This article includes information reported by Insurance Business.
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