The slow economic recovery is affecting workers’ compensation, which has been proven by a recent report released by the National Academy of Social Insurance (NASI). The report states that in 2010, benefits declined to $57.5 billion, which was a 2.7% drop from the previous year. This decrease was mostly due to a 2.1% drop in medical benefits for workers that had been injured. This ended up making employer costs the lowest they had been in 30 years.
The costs to employers are a percentage of payroll and 43 jurisdictions saw a decline. This decline is due to how slow the economic recovery has been progressing with many jurisdictions still seeing very high unemployment rates.
This report makes a first for the Academy because they actually released employers’ costs by state.
Most states reported a decrease in the number of covered workers but reported an increase in covered wages from 2009-2010. During the same time, the total benefit amount paid to injured workers increased in 25 jurisdictions and declined in 26. As a payroll share, benefits paid to injured workers dropped three cents to $.99 per $100 as a nation.
The medical benefits share for workers’ compensation increased a lot in the past 4 decades. During the 1970s, medical benefits accounted for 30% of the benefits received, whereas this figure increased to 50% in 2010. Experts believe this is due to the rising cost of healthcare in the country.