Minnesota: Paid workers' comp claims declined significantly since late '90s

The number of paid workers' compensation claims in Minnesota fell 38 percent relative to the number of employees from 1997 to 2008, according to a recently issued annual report from the Department of Labor and Industry.

"We have a good workers' compensation system in Minnesota, but we can do better," said Steve Sviggum, commissioner of the DLI. "Our focus needs to be on our two primary stakeholders -- injured workers and the businesses that pay the premiums."

Overall, Sviggum said Minnesota's workers' comp system parallels nationwide trends. Claim rates are on the decline, but costs per claim are on the rise. Total benefits increased relative to payroll from the mid-1990s to the early 2000s, but have decreased relative to payroll in more recent years. This reflects the combined effects of a consistently decreasing claim rate and increasing benefits per claim, particularly medical benefits, he said.

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"Two positive things that are working in our favor right now are an increase in safe workplaces and, compared to other states, an earlier return to work for many employees," Sviggum said. "However, parts of this report point out concerns in the Minnesota system, such as its relatively high medical costs, rehabilitation costs, and higher than average legal disputes compared to other states."

The report highlighted the following issues:

System cost. Workers' compensation system cost in Minnesota has fluctuated relative to payroll since 1997, with the 2008 value being nearly the lowest recorded. Total system cost per $100 of payroll has fluctuated since 1997.
Medical and indemnity benefits. Adjusted for average wage growth, average medical and indemnity benefits per insured claim rose substantially between 1997 and 2007. Relative to payroll, medical benefits are at about the same level as in 1997 while indemnity benefits have fallen, reflecting the net effect of the falling claim rate and higher benefits per claim. Researchers said the increase in indemnity benefits per claim is due primarily to increasing benefit duration and increases in the frequency and amounts of stipulated benefits.
Vocational rehabilitation. The vocational rehabilitation participation rate increased during most years from 1997 to 2008.
Dispute rate. The dispute rate rose substantially from 1997 to 2008.

Read more at the WorkersComp Forum homepage.

August 26, 2010

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