Trends and Controlling Costs

Benefits paid to workers and employers' costs for workers' compensation rose slightly faster than wages in 2001. This is the second year in a row since 1992 that benefits grew faster than wages and the second year in a row since 1993 that employer costs rose faster than wages.

Workers' compensation benefits and costs grew faster than wages in 2002, in large part because of the economic recession that began in March 2002. The recession brought the slowest growth in wages in more than a decade and a decline in the number of covered workers.

“The long-term decline in benefits and costs relative to wages since 1992-93 is due, in large part, to fewer reported accidents and fewer claims for workers' compensation,” explained John F. Burton, Jr., of Rutgers University and chair of the NASI Panel that oversees the study. Workplace accidents that result in lost work days declined from 3.0 to 1.6 per 100 full-time workers between 1992 and 2002, according to the U.S. Department of Labor. Industry sources report similar declines in workers' compensation claims. “Other reasons for the decline include more active management of medical care and more efficient return-to-work programs and other efforts to reduce costs,” Burton added. “At the same time, some are concerned that initiatives to control costs, discourage fraud, and tighten eligibility requirements cause injured workers to be denied benefits or discouraged from claiming them,” Burton concluded.

For more information see:

• Executive Summary to Workers' Compensation: Benefits, Coverage, and Costs 2003
• Balancing Security and Opportunity: The Challenge of Income Disability Policy, Report of the Disability Policy Panel
• Workers' Compensation and Older Workers, Health and Income Security Brief No. 3