Ferguson: NASI Reports Workers' Comp as Percentage of Payroll
Thursday, October 19, 2017 | 491 | 0 | min read
The National Academy of Social Insurance recently issued its 20th annual Workers’ Compensation: Benefits, Coverage, and Costs report. The study provides estimates of workers’ compensation payments — cash and medical — for all 50 states, the District of Columbia, and federal programs providing workers’ compensation.
The study shows that:
- Benefits per $100 of payroll fell from 92 cents in 2014 to 86 cents in 2015, the lowest level since 1980.
- Workers’ compensation employer costs per $100 of payroll dropped to $1.32 in 2015, reversing consistent growth that began after the recession.
- In 2015, workers’ compensation coverage extended to an estimated 86.3% of all jobs in the workforce, comprising more than 135 million workers.
Study authors say the drop partly reflects improved workplace safety. Also noteworthy:
“Both the incidence and severity of work-related injuries have declined steadily since 1990. In fact, according to the Department of Labor, the proportion of workers who experienced injuries that resulted in days away from work reached a 25-year low in 2015.”
The study encompasses state-by-state changes in coverage, benefits and employer costs over the last five years. The state-level results show that between 2011 and 2015:
- The number of covered workers increased in every state except West Virginia, with 11 states experiencing double-digit growth in covered employment.
- The amount of covered wages increased in every state, and by more than 20% in 16 states.
- Benefits per $100 of payroll decreased in all but three states, with the biggest declines in Illinois (minus 33 cents), Oklahoma (minus 41 cents) and West Virginia (minus 52 cents) — three states that implemented significant changes in their workers’ compensation systems during this period.
- Employer costs per $100 of covered payroll increased in 24 states and decreased in 27 others. West Virginia, Montana and Oklahoma experienced the largest reductions, with costs dropping more than 30 cents per $100 of covered payroll. Employer costs increased by more than 20 cents in Wyoming, Delaware and California.
Julie Ferguson is a marketing consultant for Lynch Ryan & Associates, a Massachusetts-based employer consulting firm. This column was reprinted with permission from the firm's Workers' Comp Insider blog.