Report: Workers’ Compensation Costs Rise, Benefits Fall

Workers’ compensation insurance is continuing to get more costly for businesses, and at the same time, workers are receiving even lesser benefits.
That’s according to the latest report from the National Academy of Social Insurance.

What this means is people injured at work in North Carolina are going to have to fight even harder to obtain benefits to which they are entitled. And even if they secure benefits, they may be in for a battle when it comes to the extent of those benefits.

The 88-page report pieced together data from a number of sources because there is a lack of uniform reporting by states when it comes to workers’ compensation benefits.

What researchers discovered was that the number of covered employees has increased. This is good news. In 2013, workers’ compensation covered nearly 130 million workers in the U.S., which was a nearly 4 percent increase in covered employment just in the last 5 years. This generally reflects increases in employment as the nation continues to recover from the recession. North Carolina, however, ranked fairly low in this regard – 35th out of 50 for growth of covered employment.

In total throughout 2013, there were $63.6 billion total benefits paid through workers’ compensation, which was an increase of more than 8 percent over a five-year period. Again, this reflects an increase of employment, and it’s also reflective of the fact that while the economy has improved, workplace safety has not.

Additionally, when the study authors looked at benefits as a percentage of payroll, there was a notable drop. On average, workers who were injured received 98 cents per $100 of covered wages. Half of these were for medical benefits, and the rest were in cash to cover lost wages. That was a five-cent decrease from 2009, when workers received $1.03 per $100 of covered wages.

Employers, meanwhile, paid an average of $1.37 per $100 of covered wages. In 27 states, the costs increased.

That’s nationally, and it should be pointed out some states fared better than others.

When it came to paid medical benefits by state, about 45 percent of the $380 million in benefits were for medical expenses, and that put us at 45th nationally.

Differences in workers’ compensation benefits by state can be attributed to:

  • Changes in number of work-related illnesses or injuries
  • Modifications to the state’s legal system for process of claims (many states have made it more difficult to collect benefits)
  • Fluctuations in state labor market
  • Differences in costs of medical care
  • Special exclusions for small businesses and those in agriculture, which may be more prevalent in some areas

North Carolina also ranked 16th for the largest increase in employer costs for workers’ compensation benefits. When employer costs are already high, this can lead to companies discouraging workers to file a claim or vigorously fighting claims that are filed.

If you have been injured at work in Winston-Salem, contact our offices today to learn more about how we can help.

If you have been injured at work, contact the Lee Law Offices at 800-887-1965.

Additional Resources:
As workers’ comp costs climb, benefits fall, Aug. 18, 2015, By Erik Sherman, MoneyWa CBS

More Blog Entries:
OSHA Proposes New Work Injury Record-Keeping Rules, Aug. 14, 2015, Winston-Salem Workers’ Compensation Attorney Blog

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