Benefits as a Share of Payroll Continue Downward Despite Rising Employer Costs

Written by on 3/20/2017 3:04 AM in , , . It has 1 Comments.

The nation’s workman's compensation insurance program provides for medical coverage for injured workers, as well as cash benefits for those whose injuries prevent them from returning to work. Paid for by employers with no deductions taken from employee paychecks, a recent study points to employers paying out continually increasing costs, despite historically low levels of benefits payouts overall.

The Cold Hard Facts:

According to the National Academy of Social Insurance (NASI) 19th annual “Workers’ Compensation: Benefits, Coverage, and Costs” report, despite growth in employment since the 2008 recession, coinciding with a rise in employees covered by workers’ comp, benefits per $100 share of payroll fell from $0.97 in 2013 to $0.91 in 2014 alone, continuing a national downward trend to beat 80's era levels.

Benefits Declined in 46 States from 2010-2014: 

WorkComp per $100 of Covered Payroll 2014 Dollar Change 2010-14
Total Benefits Paid  $0.91  -$0.10
Medical Benefits  $0.46  -$0.04
Cash Benefits  $0.45  -$0.06
Employer Costs  $1.35 -$0.10 
Benefits per $1 of Employer Costs  $0.68  -$0.13

Why the Disconnect?

Experts from NASI’s study panel point to a lag in the increase in benefits paid, particularly for costly, long-term injuries. Healthcare costs have also grown in the past 30 years, accounting for an increasing share of benefits, to rise from 29% in 1980 to more than 50% in 2014, accounting for a majority of workers' comp spending. Declining levels also point to reduced injuries and speedier return-to-work, however changes to state law limiting access to benefits may also play a role.

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