NASI: Covered Jobs and Wages Rise, Benefits to Injured Workers Decline

Liz Carey

Washington, DC (WorkersCompensation.com) –While employment and wages covered under workers’ compensation are rising, the amount of benefits paid out to injured workers continues to decline, according to a new study.

The report, Workers’ Compensation Benefits, Costs and Coverage (2017 Data) by the National Academy of Social Insurance, showed that the number of U.S. workers covered by workers’ compensation grew 4.2 percent between 2013 and 2015 and by 3.2 percent between 2015 to 2017. Covered wages also grew at an even higher rate; increasing 10.7 percent between 2013 and 2015, and then by 8 percent between 2015 and 2017.

The jobs covered also grew, except in Alaska, North Dakota, West Virginia and Wyoming. The report said those states likely experienced a decline because of the “volatile nature of the oil, gas and coal industries.”

But at the same time, the report said, benefits paid out to injured workers’ declined.

Total workers’ compensation benefits paid in 2017 decreased 2.2 percent from 2013, to $62 billion. That translates to $0.80 per every $4,100 in covered wages, $0.18 lower than that paid in 2013. The difference means a 19.6 percent decline in medical benefits and a 16.9 percent decline in cash benefits.

“Benefits per $100 of covered wages decreased in all jurisdictions except Missouri and Hawaii, where they increased by $0.09 and $0.04, respectively. Much of the increase in Missouri may be attributable to the payment of a backlog of disability claims that the state had been unable to pay for several years, due to 2005 changes in the state’s workers’ compensation law that led to the severe depletion of the relevant fund,” the report said. “The largest percent decrease occurred in Tennessee, where standardized benefits declined by 38.2 percent between 2013 and 2017. Legal changes the state put in place starting in 2014 that limit both eligibility for benefits and the types of medical treatment available help explain the sharp declines in both cash and medical benefits in recent years.”

Employers paid more, however, their costs were actually less when viewed as a percentage of covered wages in most jurisdictions. Employers’ costs in 2017 were $97.2 billion, a 9.1 percent increase since 2013. When adjusted for the increase in covered wages, employers’ costs were $1.25 per $100 of covered wages — down $0.12, or 8.8 percent from 2013.

“Costs per $100 of covered wages, or standardized costs, decreased in all but five jurisdictions, with the largest percent decrease (38.3 percent) in Oklahoma,” the authors said. “Among those with increases, the largest were in Hawaii and Missouri (up 7.3 percent and 5.6 percent, respectively), the same two states that experienced increases in worker benefits.”

The reasons for the decreases are unclear. “To the extent that costs and benefits have fallen because of improved safety at work, that is, of course, good news,” said Les Boden, Chair of the Academy Study Panel on Workers’ Compensation Data and co-author of the report, in a press release. “However, there is also evidence that suggests that many injured workers are not receiving the cash benefits and/or medical care they need, and that some states are achieving lower benefits by shifting costs rather than improving safety. We hope policymakers, reporters, researchers, and others continue to delve into these issues and advance policies that help workers and employers achieve a balance that improves outcomes for both.”

Trends

The report shows a trend in the workers’ compensation system over the past 30 years is continuing.

“This year’s report shows that the trends that have dominated the workers’ compensation system for the past three decades — declines in both workers’ benefits and employers’ costs — continue to be sustained,” noted Les Boden, Chair of the Academy Study Panel on Workers’ Compensation Data and co-author of the report. “To the extent that costs and benefits have fallen because of improved safety at work, that is, of course, good news. However, there is also evidence that suggests that many injured workers are not receiving the cash benefits and/or medical care they need, and that some states are achieving lower benefits by shifting costs rather than improving safety. We hope policymakers, reporters, researchers, and others continue to delve into these issues and advance policies that help workers and employers achieve a balance that improves outcomes for both.”

The report highlights four states – WyomingFloridaOhio, and Missouri as ‘state spotlights.’ In Ohio, the last decade has shown the state had a larger decrease in workers’ compensation benefits per $100 than in all but one other state. Worker benefits fell from $1.20 per $100 in 2007, to $0.68 per $100 in 2017 – a more than 40 percent decline.

“Two complementary sets of forces – legislative changes that limit access to and levels of benefits, and incentives for employers to improve worker safety – likely explain much of this decline,” the report said.

The Ohio Bureau of Workers’ Compensation did not respond to a request for comment by press time.

Other findings include:

  • Covered jobs increased in all jurisdictions except Alaska, North Dakota, West Virginia, and Wyoming. Covered wages increased in all jurisdictions except Wyoming.
  • Benefits per $100 of covered wages decreased in all jurisdictions except Missouri and Hawaii, where they increased by $0.09 and $0.04, respectively.
  • Costs per $100 of covered wages, or standardized costs, decreased in all but five jurisdictions, with the largest percent decrease (38.3 percent) in Oklahoma.

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