Long-term Downward Trend Continues in Number of Workers’ Compensation Claims, Insurance Cost

ST. PAUL, Minnesota, April 18 -- The Minnesota Department of Labor and Industry issued the following news release:

The number of paid workers' compensation claims fell 54 percent relative to the number of full-time-equivalent (FTE) employees from 1996 to 2016, according to the 2016 Minnesota Workers' Compensation System Report, just released by the Department of Labor and Industry.

Significant findings

* The number of paid claims fell from 8.8 per 100 FTE employees in 1996 to 4.0 in 2016.

* The cost of the workers' compensation system for 2016 amounted to $1.24 per $100 of payroll. In Minnesota and elsewhere, this cost follows a multi-year pricing cycle. However, comparable points in the cycle for Minnesota indicate a long-term downward trend.

* Adjusting for average wage growth, both medical and indemnity benefits per insured claim rose rapidly between 1996 and 2003, but grew more slowly or stabilized after 2003.

* Despite higher benefits per claim since 1996, costs are down relative to payroll because of the falling claim rate. Compared to 1996, indemnity benefits per $100 of payroll were 40 percent lower in 2016 and medical benefits were 30 percent lower.

* In 2016, on a current-payment basis, medical benefits accounted for an estimated 35 percent of total system cost, followed by insurer expenses at 31 percent and indemnity benefits other than vocational rehabilitation at 29 percent.

* The percentage of indemnity benefit claimants receiving vocational rehabilitation services rose from 15 percent in 1997 to 25 percent in 2016.

* The percentage of indemnity claims with a dispute of any type rose from 16 percent in 1996 to 21 percent in 2008 but has been stable since then.

This report, part of an annual series, presents data from 1996 through 2016 about Minnesota's workers' compensation system. The purpose of the report is to describe the current status and direction of the system and to offer explanations, where possible, for recent developments. It is available at www.dli.mn.gov/RS/WcSystemReport.asp. Copies of the report may also be obtained by calling (651) 284-5030 or 1-800-342-5354.