https://www.nasi.org/sites/default/files/WorkersComp2016_FINAL.pdf

The National Academy of Social Insurance (NASI) released their 2018 Workers’ Compensation Benefits, Costs and Coverage report which provides information on each state’s medical and indemnity spend by type of payer. They found that in general workers’ compensation benefits as a share of payroll declined in 2016 which is a continuation of a five-year trend. Employer costs as a share of payroll fell for the third year in a row.

Workers’ compensation benefits fell from $0.86 per $100 of payroll in 2015 to $0.83 in 2016, a 3.5 percent decrease and the lowest level in almost 30 years. In 36 states benefits as a share of payroll declined. Michigan and Oklahoma saw the biggest decreases of all, as benefits as a share of payroll decreased by at least 10 percent. Fifteen states saw increases and Wyoming and Iowa saw increases of more than 5 percent.

Workers’ compensation costs for employers fell from $1.44 per $100 of payroll in 2015 to $1.30 per $100 in 2016 which was a 2.3 percent decrease. The District of Columbia enjoyed the largest decrease, at 24 percent, and Texas saw costs fall by 14.3 percent. Fourteen states saw increases, New York saw the largest increase of 4.6 percent.

Marjorie Baldwin is a Professor at the Arizona State University W.P. Carey School of Business and co-authored the report. She said that variation between state data has to do with their different approaches to their workers’ compensation programs, as well as the industries represented in each state, which have varying levels of riskiness and contribute to benefits and costs.

In 2016 workers’ comp programs covered 138 million workers, an estimated 86.5 percent of all jobs in the workforce. Almost half of the $61.9 billion spent in workers’ compensation benefits that year were medical benefits that were paid to health care providers. Medical benefits have become an increasingly larger share of total benefits paid, up to 50.3 percent in 2016 compared to 39.9 percent in 1996. Workers’ compensation benefits and costs as shares of payroll both declined significantly between 1991 and 2016.

Les Boden, Professor at the Boston University School of Public Health and co-author of the report, said that the decline in benefits as a share of payroll might have been even greater but there has been a substantial increase in medical costs over the past 30 years.

Employer costs in 2016 totaled $96.5 billion, premiums paid to insurers were the largest share of those costs at $59.9 billion, or 62 percent. Almost $18 billion of comp costs were paid by self-insured employers.

Read the press release, check out the full report and look into state-specific findings for Michigan, New York, Ohio, Oklahoma and Tennessee.

Workers’ Compensation Benefits, Costs and Coverage from National Academy of Social Insurance