Vermont Workers’ Compensation Rates: Benefits, Premiums, and MOD

Vermont workers’ compensation rates work on two tracks. An injured employee’s weekly benefit is two-thirds of their average weekly wage, bounded by minimum and maximum figures the Commissioner of Labor resets every July 1. An employer’s premium is built from National Council on Compensation Insurance (NCCI) loss costs approved by the Vermont Department of Financial Regulation, then adjusted by the business’s classification code, claims history, and payroll. Both numbers move each year, so the current figure always depends on when you’re asking.

How the Weekly Benefit Is Calculated

The weekly compensation rate is 66⅔ percent of the injured worker’s average weekly wage, and that percentage applies whether the disability is temporary or permanent.¹ The average weekly wage comes from earnings during the 26 weeks before the injury. Weeks the worker missed because of illness or a work suspension drop out of the calculation, so the average reflects actual earning capacity rather than being dragged down by unpaid time.²

If you worked for more than one insured employer at the time of the injury, all those earnings combine into a single average weekly wage. The insurance liability, however, sits entirely with the employer whose workplace the injury happened in.²

Minimum and Maximum Weekly Rates

No worker receives more than the maximum weekly rate or less than the minimum, with one exception: if your actual average weekly wage is below the minimum, your benefit equals your full average wage rather than the minimum figure.³

Both the floor and the ceiling are tied to the statewide average weekly wage and reset every July 1.¹ The Vermont Department of Labor keeps a historical table of the annual figures, which is the right place to pull the number in effect for any given injury date.⁴ Check it against the current year before you estimate a benefit; using last year’s cap can throw the number off noticeably.

Cost-of-Living Adjustments

The rate set at the time of injury is not frozen. Vermont applies annual cost-of-living adjustments so a worker’s benefit keeps the same proportional relationship to the statewide average wage it had when the injury happened.⁵

For temporary total and temporary partial disability, the first adjustment happens on the July 1 after the worker has received 26 weeks of benefits, and then every July 1 after that. For permanent partial and permanent total disability, the adjustment applies each July 1 following the injury date, whether or not benefits were being paid on every intervening July 1.¹ Each time the rate changes, the insurance adjuster files a Notice of Change in Compensation Rate (Form 28).⁶

Benefit Types and Durations

All three disability categories pay at the same 66⅔ percent rate and are subject to the same annually adjusted caps and cost-of-living mechanism. What differs is how long payments run and how the duration is figured.

Temporary total disability pays when a worker cannot perform any work during recovery. Benefits continue until the worker can return to employment or reaches maximum medical improvement, and the employer must review any claim that continues beyond 104 weeks.⁵
Permanent partial disability begins once total disability ends. The number of weeks of payment equals the worker’s whole-person impairment percentage multiplied by 330 weeks.⁷
Permanent total disability covers catastrophic injuries or conditions that Vermont law treats as permanently and totally disabling.¹

Death Benefits

When a work injury causes death, the rate paid to dependents depends on the family structure:

Spouse with no dependent children: 66⅔ percent of the deceased worker’s average weekly wage.
Spouse with one dependent child: 71⅔ percent.
Spouse with two or more dependent children: 76⅔ percent.
Dependent children with no surviving spouse: the same amount that would have gone to a spouse with that number of children, split equally.
Dependent parents, where there is no spouse or children: 30 percent if wholly dependent, 20 percent if partially dependent.

The insurer also pays burial and funeral expenses up to $5,500 and up to $1,000 for out-of-state transportation of the deceased to the burial site. Death benefits receive annual cost-of-living adjustments and, unlike other benefit types, can exceed the maximum weekly compensation rate.⁶

How Employer Premium Rates Are Set

Vermont employers do not negotiate premium rates from scratch. Each year, NCCI collects claims data from carriers and calculates loss costs for the state, meaning the expected future cost of medical care and wage replacement for specific types of work. NCCI files those loss costs with the Vermont Department of Financial Regulation, which reviews the filing and may approve a different figure than NCCI recommended. Individual carriers then take the approved loss costs as a starting point and add their own overhead and profit to arrive at a final premium rate.⁸

Because carriers set their own expense loadings, two employers in the same industry can pay noticeably different rates depending on which carrier they use. The most recent NCCI filing for Vermont, effective April 1, 2025, included an overall 7.4 percent decrease in loss costs, reflecting an improving claims environment.

Classification Codes, MOD, and the Premium Formula

Every job role in a business receives an NCCI classification code based on the work performed, and those codes group similar occupations by risk level. A logging operation carries a much higher base rate than a law office. Using the wrong code can lead to overpaying or, more dangerously, underpaying and getting hit with a large audit bill later.

The base rate for each classification is then adjusted by the employer’s experience modification factor, usually called the MOD. NCCI calculates the MOD by comparing the employer’s actual claims history to the average expected losses for that class. A MOD below 1.0 means a better-than-average safety record and a premium discount; a MOD above 1.0 means a higher premium. Most small employers sit at a default MOD of 1.0 because there isn’t enough claims data to calculate a meaningful deviation.⁹

Premiums are calculated per $100 of payroll. The formula is:

(payroll ÷ 100) × classification rate × experience modification factor.

Getting an accurate payroll estimate at the start of the policy year matters, because the insurer audits the actual figures afterward. If actual payroll was higher than estimated, you get a bill for the difference; if lower, you get a refund or credit toward next year’s policy. Payroll for premium purposes includes all wages except tips, group health or life insurance benefits, and expense reimbursements. A false statement made to secure a lower premium can draw an administrative penalty of up to $5,000.¹⁰

Ways to Lower a Premium

Because carriers add their own loadings on top of approved loss costs, shopping the account among carriers is one of the most direct ways to lower a premium without changing anything about the business itself. Over the longer term, a cleaner claims history pushes the MOD down and takes the premium with it.

Vermont also runs a targeted incentive for the logging industry. Employers whose workers meet training standards and demonstrate safe practices through an on-site consultation can qualify for a 15 percent discount on their workers’ compensation premiums under special classification codes.¹¹ Some carriers offer their own safety-program credits as well, so it’s worth asking during the quote process.

The Assigned Risk Pool

An employer who cannot find a carrier willing to write a policy in the voluntary market can get coverage through Vermont’s assigned risk pool, also called the residual market. The Department of Financial Regulation publishes assigned risk rate sheets, which are based on NCCI data and tend to run higher than voluntary market rates because the pool covers employers private carriers have deemed too risky.⁹ Getting out of the pool usually means improving the claims record and asking an agent to remarket the account to voluntary carriers once the MOD comes down.

1
Cornell Law Institute. Vermont Code of Rules 24-010-003-X – Workers’ Compensation
2
Vermont General Assembly. Vermont Code 21 – 650 – Payment, Average Wage, Computation
3
Vermont General Assembly. Vermont Code 21 – 601 – Definitions
4
Vermont Department of Labor. Minimum and Maximum Compensation Rates – Annual Change
5
Vermont General Assembly. Vermont Code 21 – 642 – Temporary Total Disability Benefits
6
Vermont Department of Labor. Indemnity Benefits Adjusters Manual
7
Vermont General Assembly. Vermont Code 21 – 648 – Permanent Partial Disability Benefits
8
Vermont Department of Financial Regulation. Techniques to Stabilize Vermont Workers Compensation Premium Costs and Minimize the Impact of Large Claims
9
Department of Financial Regulation. Workers Compensation
10
Vermont Department of Labor. A Guide for Vermont Business Owners – Workers Compensation Insurance
11
Vermont Department of Forests, Parks and Recreation. Vermont Logger Safety and Workers Compensation Insurance Program