ISHN

Comp costs continue to decline

June 21, 2002
Workers' compensation benefit payments and costs declined in 2000, marking the eight straight year of declining benefits relative to covered wages and the seventh consecutive year that employer costs declined relative to wages, according to a new report released by the National Academy of Social Insurance.

Workers' comp bennies for every $100 in wages dropped by 39 percent from their peak of $1.68 in 1992 to $1.03 in 2000. Employer costs declined by 42 percent between 1993 and 2000, or from $2.16 to $1.25 per $100 of wages.

"The long-term decline in benefits and costs relative to wages is due, in part, to strong wage growth and fewer reported accidents," said John F. Burton, Jr., of Rutgers University and chair of the NASI panel that produced the study.

The number of workplace accidents resulting in lost workdays plummeted from 3.0 per 100 workers in 1992 to 1.8 per 100 workers in 2000, according to the Labor Department.

But there are also concerns that the drop in comp costs stems from more injured workers being denied benefits as states have tightened eligibility rules for workers' compensation, and more aggressive - some say too hasty - return-to-work programs (injury cases resulting in restricted work activity have climbed dramatically since the early 1990s).

Many of these changes were put into place in response to rising comp costs in the late 1980s and early 1990s.

These trends are examined in a NASI Brief, "Workers' Compensation and Older Workers," at www.nasi.org.