The Massachusetts Supreme Judicial Court upheld the insurance commissioner’s authority to reject proposed workers’ compensation rates, but found that the reason for a statewide 14.6% cut wasn’t adequately explained. The ruling sends the rate decisions for 2024 and 2025 back for further consideration. That distinction matters: the court accepted the commissioner’s power to set rates while questioning whether the record made clear how he arrived at these particular decisions.
The dispute concerns how workers’ compensation premiums are set across Massachusetts. Rate filings give the commissioner a proposed basis for what employers will pay, while the commissioner can reject a filing and determine a different outcome. That authority leaves room for judgment, but the court’s ruling makes clear that judgment still needs an explanation readers can follow. The question here wasn’t simply whether a reduction could be ordered; it was whether the chosen reduction had a reasoned basis.
How the two rate decisions unfolded
The dispute began with a December 2023 filing by the Workers’ Compensation Rating and Inspection Bureau of Massachusetts. The bureau sought an average rate decrease of 7.6%, effective July 1, 2024. The commissioner rejected that proposal and ordered a larger reduction of 14.6%, setting the central issue the court later examined: why this figure, rather than the bureau’s, was justified.
The next filing concerned rates effective July 1, 2025. The bureau sought an average increase of 7.1%, but the commissioner rejected that filing and retained the reduced rates. The two decisions therefore involved different proposals, yet the court directed the commissioner to address the relevant concerns for both rate years. A clear explanation for one decision wouldn’t automatically resolve questions about the other.
For employers, insurers, and workers who follow these filings, the sequence shows why a rate decision can’t be understood solely by looking at whether the final rate went up or down. The bureau’s proposals and the commissioner’s orders reflect competing judgments about the information used to set rates. The court’s review focused on whether those judgments were supported and explained, not on choosing a preferred percentage itself.
Historical data and the size of the cut
The court backed the commissioner’s use of five years of historical indemnity loss data rather than two. Indemnity losses relate to compensation paid for workers’ injuries, so the period used to assess those losses can shape the picture presented by a rate filing. A longer record can reduce the influence of a brief period that departs from ordinary experience, although the choice of period still needs to fit the circumstances being assessed.
Here, the court found that the five-year period reasonably accounted for unusual patterns around the COVID-19 pandemic. Losses were historically low in 2020 and higher in 2021 and 2022, according to the ruling. Looking at only two years could give those swings outsized influence, while a longer window offered a broader basis for evaluating the pattern. The court accepted that rationale for the data period.
That support didn’t settle the separate question of the final reduction. The commissioner rejected the bureau’s proposed 7.6% decrease and ordered a 14.6% cut, but didn’t explain why the larger figure was appropriate. The court observed that 14.6% fell between the bureau’s recommendation and the Massachusetts attorney general’s proposed 17.5% cut. Its position between those two figures, by itself, didn’t explain the reasoning behind the decision.
This is more significant than it looks. A number can appear moderate because it sits between two proposals, but that tells the reader where it falls, not how it was calculated or why it fits the evidence. In a rate-setting process, the explanation connects data choices to the result. Without that link, employers and other affected parties can see the outcome without being able to assess the reasoning that produced it.
Class code 9033 remains unresolved
The court also asked the commissioner to explain his treatment of class code 9033, which primarily covers public housing authority employees. The commissioner directed the bureau to change how it calculated rates for the classification. The court said questions remained about whether the alternative data was reliable and why this particular code was singled out.
Classification codes group work with shared features for rate-setting purposes, so a change to the method for one code can affect how the resulting rate reflects that group. The ruling doesn’t resolve whether the alternative data was sound or whether a different approach was warranted. It requires the commissioner to address those questions with a clearer account of the evidence and the reason for treating code 9033 differently.
(And this is the part most people overlook.) A dispute over one classification can raise a broader question about how a rate system handles categories that may not fit neatly into the same method. That doesn’t establish that the approach used here was wrong. It does mean the rationale needs to show why the chosen method and data make sense for the classification at issue.
What the ruling leaves to be explained
The commissioner must provide a reasoned basis for the 14.6% reduction and address the concerns about class code 9033 for both rate years. The ruling preserves the commissioner’s rate-setting authority while requiring a clearer account of how the decisions were reached. It doesn’t supply a replacement rate or decide that the bureau’s proposals should have been adopted.
That leaves the practical outcome open to further consideration. The central test will be whether the commissioner’s explanation connects the evidence, the treatment of the class code, and the final rate decisions in a way the court can assess. If you’re working in this space, the distinction is useful: approval of the data period doesn’t answer the court’s questions about the size of the cut or the treatment of one classification.
The numbers here are underwhelming as an explanation. They show the competing proposals and the order that followed, but the court found that the path from one to the other wasn’t clear enough. A more detailed rationale may clarify that path; until the commissioner addresses the issues the court identified, the basis for both rate years remains under review. The authority stands. The reasoning still has to be supplied.