New Risks in Workers' Comp the Rise of Mining

Thursday, May 31, 2012 | 0

While construction is still in the dumps, there's been a remarkable recovery in what was once thought to be a gone-forever industry mining. While the mineral mines in Michigan, oil shale projects in North Dakota, copper mining in the southwest and oil and gas in near-shore and Arctic areas have yet to hit their full stride, the growth in employment in extractive industries has been significant - up almost sixty percent over the last ten years, with an increase of 12% since the beginning of 2011.

The U.S. Bureau of Labor Statistics projects employment to grow by almost 25% from 2010 to 2020, and current hiring levels make that projection appear to be conservative.

Wages are also high at over $28 an hour, and the average work week is well over full-time. This is balanced by a decline in frequency for OSHA reportable injuries/illnesses, but the underlying trend is clear the mining and extractive industries are experiencing a rebirth, one that will dramatically affect workers comp albeit in selected states.

This has already hit North Dakota, where the state's monopolistic fund, already under fire for what can fairly be termed gross incompetence and possibly intentional negligence, is hard pressed to deal with the huge growth in oil and gas in the western part of the state. Tough to focus on business when you're consumed with circling the wagons to hold off legal inquiries into denying injured workers benefits.

The implications for comp are obvious.

Injury rates in extractive industries are higher than average, and the types of injuries tend to be more severe.

There are fewer opportunities for transitional duty to help recovering workers get back on the (a) job.

Job sites are often located far from cities and comprehensive medical care services.

New employees may not receive adequate training in safety and loss prevention.

What does this mean for you?

Work comp executives, regulators, and service providers would be well-served to closely monitor employment projections; while these shifts will only affect certain states, the impact they will have on those states is likely to be significant.

<i>Joe Paduda is co-owner of CompPharma, a consortium of pharmacy benefit managers, and owner of Health Strategy Associates, a Connecticut employer consulting firm. This column was reprinted with his permission from his Managed Care Matters blog.</i>