Employers' costs for workers' comp is lowest in decades, NASI reports

The recession's impact on the workers' comp system is dramatically evident in the latest report from the National Academy of Social Insurance.

While not surprising, the 2009 data from the Washington, D.C.-based nonprofit research organization includes several stunning statistics.

The number of covered workers in the workers' comp system dropped by 4.4 percent -- the biggest decrease in two decades.
Employers' costs for benefits fell by 7.6 percent to less than $74 billion -- the lowest in the last 20 years.
Payments for medical care dropped by 1.1 percent -- the first decline in a decade.

The figures are included in Workers' Compensation: Benefits, Coverage, and Costs, 2009, the 14th in a series of reports from NASI. It provides comprehensive national data on the largely state-run program.

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Despite having fewer workers to cover due to the recession, benefits paid in 2009 actually increased by 0.4 percent, to $58.3 billion. That reflected "in part benefits provided in 2009 to workers injured in prior years," according to John F. Burton Jr., chair of the panel that oversees the report.

The report shows some wide variations among the states. Total benefits paid to injured workers in 2009 increased in 24 jurisdictions while they declined in the remaining 27 states.

The District of Columbia saw the largest percentage of increased benefits, up more than 14 percent from the previous year. Other states that had double-digit benefit increases included Massachusetts and Vermont.

On the other side, benefits paid in Virginia in 2009 dropped by more than 21 percent -- the largest decline. South Dakota also had a double-digit decline in benefits paid.

Variations among larger states. California and Ohio paid less in benefits in 2009 compared to 2008. Florida, Illinois, New York, and Texas paid more. Pennsylvania remained relatively unchanged.

The $9.3 billion in benefits paid in California represented a 1.6 percent decline from 2008 figures. Both medical and indemnity benefits were less.

Pennsylvania's $2.9 billion in benefits represented a slight decrease in medical benefits and a small increase in cash benefits. Both medical and indemnity benefits paid in Ohio were lower for an overall decrease of 5.5 percent.

The 5.5 percent increase in benefits paid in Florida included 5.2 percent more in medical and 4.7 percent more in indemnity benefits.

Illinois' medical benefits paid increased by 0.9 percent while cash payments increased by 3 percent.

While New York paid 1.1 percent more in medical benefits, indemnity payments increased by 14 percent for an overall increase of 7.4 percent.

Texas, the only state that allows employers to opt out of the workers' comp system, saw a 1 percent increase in medical payments and a 7.9 hike in cash payments for an overall increase of 3.7 percent.

Read more at the WorkersComp Forum homepage.

September 6, 2011

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