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PRESS RELEASE: In Ohio, Workers’ Compensation Benefits and Costs as a Share of Covered Payroll Drop Sharply

For Immediate Release: October 11, 2018

Contact: Griffin Murphy, (202) 452-8097
gmurphy1@nasi.org Adam Bradley, (301) 656-0348
adam@thehatchergroup.com

WASHINGTON, D.C. – In 2016, workers’ compensation benefits paid and employer costs as shares of covered payroll dropped dramatically in Ohio compared to the rest of the U.S., according to a new report from the National Academy of Social Insurance (the Academy).


In Ohio, workers’ compensation costs to employers as a share of covered payroll declined 13.8 percent in 2016. The decline in employer costs followed another large percentage decline in 2015. Altogether, workers’ compensation costs to Ohio employers fell 29.9 percent from 2014 to 2016, the largest two-year decrease in the country.


The Academy’s report, Workers' Compensation: Benefits, Costs, and Coverage, also highlights five-year changes in workers’ compensation benefits paid and costs to employers from 2012 to 2016. Over this period, the decline in employer costs in Ohio as a share of payroll far outpaced the rest of the country. In Ohio, employer costs fell by $0.27 per $100 of covered payroll, compared to a $0.05 decline nationally (Figure 1). By 2016, workers’ compensation costs as a share of payroll were $0.51 lower in Ohio than the national average.


In Ohio, the majority of employers purchase workers’ compensation insurance from an exclusive state fund. Some large employers are allowed to self-insure. According to the report, the state fund accounted for 82 percent of total benefits paid to injured workers and their medical care providers in 2016.


Workers’ compensation benefits paid per $100 of covered payroll in Ohio decreased by $0.28 per $100 of covered payroll over the five-year period, a 27.2 percent decline and the second-largest drop among all 50 states and the District of Columbia. The sustained decline moved Ohio from paying well above the national average in 2012, to well below the average in 2016 (Figure 2).


Dr. Abe Al-Tarawneh, Chief of the Ohio Bureau of Workers’ Compensation (BWC) Division of Safety and Industrial Hygiene, said there have been no changes to the structure of benefits offered to injured workers over this period.


“Declines were primarily driven by continuous decreases in the frequency and severity of injuries coming into the system,” said Dr. Al-Tarawneh. “We have also expanded the reach and effectiveness of BWC’s safety programs and services. Over the past eight years, Ohio reduced occupational injuries coming into the system at a pace far surpassing the rest of the nation.”


Ohio also differs from most other jurisdictions in the share of benefits paid for injured workers’ medical care. Nationwide, medical benefits (paid to medical care providers) and cash benefits (paid to injured workers in compensation for lost wages) accounted for approximately equal shares of total benefits paid in 2016. In Ohio, however, cash benefits accounted for 61 percent of benefits paid, while medical benefits accounted for only 39 percent, among the lowest proportion in the nation.


“Ohio has made significant gains in managing the costs of workers’ compensation through strong fiscal and financial stewardship, and by controlling and minimizing the effects of inflation on medical care costs,” said Dr. Al-Tarawneh.




Workers’ Compensation: Benefits, Costs, and Coverage (2016 data) is the 21st in an annual series. The report provides the only comprehensive data on workers’ compensation benefits, costs, and coverage, for the nation, the states, the District of Columbia, and federal programs.


EXPERTS TO CONTACT:


Christopher McLaren


National Academy of Social Insurance
(202) 243-7280
cmclaren@nasi.org

Marjorie Baldwin


W. P. Carey School of Business
Arizona State University
(480) 965-7868
marjorie.baldwin@asu.edu

Les Boden


Boston University School of Public Health
(617) 358-2651
lboden@bu.edu


 


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The National Academy of Social Insurance is a non-profit, nonpartisan organization made up of the nation’s leading experts on social insurance. Its mission is to advance solutions to challenges facing the nation by increasing public understanding of how social insurance contributes to economic security.