In April 2026, Nebraska passed an important update to its Workers’ Compensation rules with key provisions going into effect on January 1, 2027.
One notable change involves how workers’ comp deductibles are handled, and it’s something employers should be aware of as they prepare for their upcoming renewals. Understanding these changes now can help you make informed decisions that protect your business and manage your overall workers’ compensation costs effectively.
What’s Changing?
Nebraska has long required insurers to offer a medical deductible option ranging from $500 to $2500 per claim. Starting in 2027, this deductible will be treated as a net deductible rather than a gross deductible.
Here’s what that means: This deductible only applies to the medical portion of a claim, not indemnity costs. Under the new net reporting structure, the medical costs you reimburse to your carrier under the deductible will not be reported to your experience mod. However, indemnity costs will continue to be reported and will impact your mod.
Example: If you have a $2500 deductible and have a claim with $1000 in medical costs and $1500 in indemnity costs, you would reimburse your carrier for the $1000 medical portion. That amount would not be reported to your mod. The $1500 indemnity portion would be paid by the carrier and would impact your mod.
A New Larger Deductible Option
The update also introduces a larger deductible option for qualifying employers. Carriers may now offer deductibles of up to 40% of your annual workers’ compensation premium, with a minimum deductible of $50,000. However, to be eligible for this, your premium would need to be at least $125,000.
Unlike the smaller medical-only deductible, this larger option covers all costs, both medical and indemnity. Claims paid under this deductible are fully net reported by default, meaning they are credited against your experience mod and the claim amount will reflect the total incurred minus the deductible.
Example: A $50,000 claim would be fully removed. A $100,000 claim would show at $50,000.
However, employers have the option to elect a gross reportable deductible policy instead. Choosing gross reporting means that losses reimbursed under the deductible will still be fully included in your experience mod. It’s important to work with your carrier to ensure that your elected deductible option is reflected on the policy.
What Could This Mean for Your Business?
It’s essential to look at your total cost of risk, not just your premium in isolation. The goal isn’t to find a quick way to buy down your mod. It’s to understand what you’re actually buying and whether it aligns with your claims history, cash flow, and overall risk management strategy. Choosing the wrong deductible structure could increase your total spend over time, especially if your claims experience doesn’t support it.
It also remains to be seen how carriers will adjust their offerings and pricing in response to these changes. What works well today may shift as the market adapts to the new rules.
Next Steps
UNICO’s team of expert advisors is closely following these updates and ready to help you understand what they might mean for your business. If you’re interested in exploring how these changes might affect your workers’ compensation program, we can review your renewal together and provide personalized guidance. At UNICO, we’re committed to partnering with you to navigate these evolving regulations with confidence and clarity.
For a consultative approach to navigating coverage and pricing changes within the insurance market, contact a UNICO Advisor.
The information provided in this article is for informational purposes only and should not be considered as legal or insurance advice. Please consult with a qualified professional for guidance tailored to your specific situation.
