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Job Losses Cause Workers' Compensation Coverage and Costs to Fall

Source: NASI

Posted on 17 Aug 2011

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The number of workers covered by workers’ compensation dropped by 4.4 percent in 2009, the biggest decrease in two decades, according to a report released on Tuesday by the National Academy of Social Insurance.  Employer costs for benefits fell by 7.6 percent to $73.9 billion in 2009 (the most recent year with complete data), reflecting the overall decline in employment.

"As one might expect, when the Great Recession hit, employers paid less in workers’ compensation costs because there were fewer workers to cover,” said John F. Burton, Jr., chair of the panel that oversees the report. “Although the drop in employer costs represents the biggest decrease in the last two decades, benefits increased slightly by 0.4 percent to $58.3 billion, reflecting in part benefits provided in 2009 to workers injured in prior years."

The total benefits paid to injured workers in 2009 increased in 23 states and the District of Columbia while declining in the remaining 27 states, compared to the previous year. Payments for medical care declined for the first time in a decade by 1.1 percent to $28.9 billion, although they continue to make up roughly half of total workers’ compensation benefits. Employers paid a total of $73.9 billion nationwide for workers’ compensation with a cost of $1.30 per $100 of payroll, the lowest in the last thirty years.

The new report, Workers’ Compensation: Benefits, Coverage and Costs, 2009, is the fourteenth in the series which provides the only comprehensive data on workers’ compensation benefits for the nation, the states, the District of Columbia, and federal programs.