For Immediate Release: July 21, 2005
California, Hawaii, Maryland, Michigan, New York, Ohio, Oregon, Pennsylvania, Washington
Total workers compensation payments for injured workers rose by 3.2 percent to $54.9 billion, while employer costs rose by 9.6 percent to $80.8 billion. When shown relative to aggregate wages of workers, payments rose by just one cent for every $100 of wages in 2003 – or from $1.15 to $1.16 (Figure 1). The costs to employers -- which include the premiums they pay for workers' compensation insurance (or their administrative costs if they self insure) -- rose by 12 cents per $100 of wages, to $1.71 in 2003.
Since the low point in 2000, employer costs per $100 of wages rose by 39 cents, from $1.32 to $1.71, while total payments on workers' behalf rose by 12 cents from $1.04 to $1.16 per $100 of payroll.
Despite the recent rise in costs, both costs and benefits in 2003 remain far below their peak levels relative to wages. Total payments for cash benefits and medical care combined peaked in 1992 at $1.69 per $100 of wages, which is 52 cents higher than in 2003. Costs to employers peaked in 1993 at $2.16 per $100 of wages, which is 45 cents higher than in 2003.
According to Burton, “The decline in employer costs in the 1990s occurred as favorable investment returns led insurance companies to cut premiums in order to expand their market shares. Since 2000, low interest rates and poor stock market returns led insurers to raise premiums in order to cover future benefit costs.”
Since 2000, the growth in payments on workers' behalf is due largely to increased spending for medical care. Of the 12-cent increase per $100 of wages between 2000 and 2003, nine cents was due to increased spending for their medical treatment, while three cents were increased payments to replace lost wages.
The report, Workers' Compensation: Benefits, Coverage, and Costs, 2003, is the eighth in a NASI series that provides the only comprehensive national data on this largely state-run program. The study provides estimates of workers' compensation payments – cash and medical – for each state, the District of Columbia, and the federal programs providing workers' compensation benefits.
NOTE TO REPORTERS AND EDITORS: The full report and state-specific information are available from the Academy's website at www.nasi.org. For a free copy of the printed report, contact Jill Braunstein at (202) 452-8097 or by e-mail at jillbraun@nasi.org.
EXPERTS TO CONTACT:
Ishita Sengupta
National Academy of Social Insurance
(202) 452-8097
isengupta@nasi.org
Virginia Reno
National Academy of Social Insurance
(202) 452-8097
vreno@nasi.org
John F. Burton Jr.
Study Panel Chair
Rutgers University
(732) 274-0600
jfburton@rci.rutgers.edu
Robert E. McGarrah, Jr.
worker perspective
AFL-CIO
(202) 637-5335
(202) 431-9838 cell
rmcgarra@aflcio.org
Donald Elisburg
worker perspective
Donald Elisburg Law Office
(301) 299-2950
delisbur@infionline.net
Eric J. Oxfeld
employer perspective
UWC – Strategic Services on Unemployment and Workers' Compensation
(202) 637-3463
oxfelde@uwcstrategy.org
Robert Steggert
employer perspective
Marriott International, Inc.
bob.steggert@marriott.com
Barry Llewellyn
National Council of Compensation Insurance
(201) 386-2627
Barry_Llewellyn@ncci.com
Eric Nordman
National Association of Insurance Commissioners
(816) 783-8005
enordman@naic.org
The National Academy of Social Insurance is a nonprofit, nonpartisan organization made up of the nation's leading experts on social insurance. Its mission is to promote understanding and informed policymaking on social insurance and related programs through research, public education, training, and the open exchange of ideas.
# # #