Minnesota Workers' Compensation Premiums Dropped

State medical payments remained stable in 2025 as premium rates for employers continued to decline.

Updated on Oct. 14, 2026 in Nursing Jobs

Isometric editorial illustration of an industrial gear mechanism inside a modular housing, representing insurance system stability. — Minnesota employers will see a 4.6% reduction in workers' compensation premium rates for 2026, supported by stable medical claim costs. AI Illustration. Upload story photo >

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Medical payments per workers' compensation claim in Minnesota stayed consistent throughout 2025. This stability helped drive a 4.6% reduction in pure premium base rates for 2026.

Why it matters

The recent stabilization of medical costs helps lower insurance expenses for state employers. These trends are expected to continue supporting rate softening for upcoming policy renewals.

Minnesota's average pure premium rate for 2026 is 44% lower than in 2004 and 34% lower than in 2016. Additionally, the average premium for the Minnesota Workers' Compensation Assigned Risk Plan will fall 3.8% for policies effective January 1, 2027.

The players

Minnesota Workers' Compensation Insurers Association

This organization manages and reports on workers' compensation data and advisory pure premiums in Minnesota.

Minnesota Workers' Compensation Assigned Risk Plan

This entity provides workers' compensation insurance coverage for employers who are unable to obtain coverage in the voluntary market.

The details

Updates made to the state hospital outpatient fee schedule in October 2023 played a significant role in keeping medical costs per claim stable. While pure premium base rates have decreased, indemnity severity saw a 24% increase over the five years leading up to 2026.

2004 served as the baseline year for premium rate comparisons.
2016 served as an additional baseline year for premium rate comparisons.
October 2023 saw the implementation of updated hospital outpatient fee schedules.
2025 marked a year of stable medical payments per claim across the state.
January 1, 2027, will see a premium reduction for assigned risk plan policies.

Market Landscape

Operating within Minnesota's open-rating system, insurers utilize advisory pure premiums to remain competitive while adjusting for cost changes. This environment shifts market share by encouraging insurers to manage their own risk profiles while keeping overall costs constrained for state employers.

For employers across the state, these rate changes indicate a potential for lower insurance costs in their upcoming annual budget cycles. Business owners should consult their providers to see how these advisory premium adjustments will specifically reflect in their 2027 policy renewals.

The takeaway

Maintaining stable medical payments is a key strategy for keeping workers' compensation costs predictable. Employers are encouraged to monitor shifts in indemnity severity to better anticipate future changes in their annual premium requirements.