Indemnity Severity Less for Older Workers While Medical is Higher
With the latest downturn in the economy, the fluctuations in the stock market, and the decline in home prices, experts predict baby boomers will stay in the workforce even longer. These events have sparked interest in the implications for workers' compensation claims of persons working beyond age 64.
To address these concerns, the National Council on Compensation Insurance recently issued a study that examines how workers aged 65 and older differ from all workers in terms of their share of claims, indemnity and medical payments, frequency, and indemnity and medical severity (i.e., cost per claim). It also explores the implications for workers' comp claims management and loss costs.
Study highlights. Among the highlights of the report, NCCI researchers found that:
- Falls, slips and trips are the leading cause of injury among older workers. Nearly half (47 percent) of workplace injury claims among workers aged 65 and older result from falls, slips and trips. Researchers said that is nearly twice the share for all workers. In contrast, the study noted that claims involving strains (largely back-related) account for 38 percent of claims for all workers versus 23 percent for older workers. Researchers said these differences partly reflect a lower share of employment among older workers in industries and occupations requiring heavy lifting, such as construction, manufacturing, and installation and repair.
- Indemnity severity is less for older workers. Researchers said this is largely because of the lower average weekly wage of such workers. There is a distinct (downward) break in indemnity severity between ages 60-64 and 65 and older, the study noted.
The study found that the pattern of older workers having lower indemnity severity is also evident for most categories of workplace injuries. For 96 percent of claims, older workers have relatively lower indemnity severity.
- Medical severity is higher for older workers. Researchers noted that the differential between workers aged 65 and older and other age groups is small. Medical severity for older workers is higher than that for employees of all ages for most categories of injuries. For 88 percent of claims, older workers have relatively higher medical severity.
- Frequency is less for older workers. The study found that this is especially true in the more hazardous manufacturing and construction-related industries and occupations. In contrast, claim frequency is higher for older workers in the leisure and hospitality industry and food preparation and service occupations (as well as in sales and related occupations).
- Aging workforce presents challenges and opportunities. For safety and loss prevention managers, researchers said the increase in the number of older persons in the workforce presents both challenges and opportunities. The challenges reflect the fact that as people age there appears to be a deterioration in factors such as eyesight, hearing, muscle tone, reaction time and mental processes. The opportunities, researchers said, involve steps that can be taken to reduce the risks in the workplace for older workers and account for these changing circumstances. For example, to reduce the risks of falls, employers can enhance lighting where necessary, install slip-resistant flooring, and provide handrails. Employers can also provide wellness and exercise programs, and provide information and support for common health problems that may affect older workers, such as arthritis and adult-onset diabetes.
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February 18, 2010
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