Workers' compensation costs and benefits declined sharply in the first year of the pandemic, with significant variation across states

Washington, Nov. 08, 2022 (GLOBE NEWSWIRE) -- The National Academy of Social Insurance issued its 25th annual report on Workers’ Compensation Benefits, Costs, and Coverage – 2020 Data which contains updated data for 2016 – 2020. The report contains nineteen tables, seven figures, and five appendices covering national and state-level data relevant to workers’ compensation outcomes. These data range from benefits, costs, and coverage to U.S. Department of Labor data on injuries and fatalities, and data on the overlaps between Social Security disability insurance and the workers’ compensation system.  

“This report provides further evidence of the impact of the COVID-19 pandemic on our social insurance systems,” said Jennifer Wolf, Chair of the Study Panel on Workers’ Compensation Data and President, Minnesota Workers’ Compensation Insurers Association. “In addition to its impacts on employment, the pandemic placed pressure on workers’ compensation and other disability benefit programs to keep households afloat. The Academy’s publication provides unique insights for policymakers, researchers, and advocates of the magnitude of and changes within workers’ compensation programs in the first year of the pandemic.” 

In addition to the usual five-year study period data, this year’s report also highlights the one-year change in benefits, costs, and coverage between 2019 and 2020. In the first year of the pandemic, total benefits and total costs declined by 6.5% and 7.2%, respectively; more than the 6.1% decrease in covered jobs. When standardized (per $100 of covered wages), the pandemic-era declines in benefits and costs were even sharper, at 7.9% and 8.8%, respectively. The benefit decline was driven by a 12.8% decrease in standardized medical benefits; indemnity benefits fell by only 3.1%. And while these declines in standardized costs and benefits continue a multi-decade long trend, the 2020 declines were especially large. 

State experiences in the first year of the pandemic varied considerably, with benefit changes ranging from an increase of 5% to a decrease of 22%. Three states—Hawaii, Oklahoma, and South Carolina—observed an increase in standardized benefits, bucking the nationwide decline. Alabama, North Dakota, and Virginia saw the largest benefit decreases. South Carolina was the only state to experience an increase in standardized costs, of 1%, while Alabama, Kentucky, and Washington D.C., observed the largest cost decreases, which ranged from 15% to 18%.  

“Crises such as the COVID-19 pandemic make abundantly clear the need for strong and resilient social insurance systems,” said Bill Arnone, CEO of the Academy. “As we prepare for the next crisis, states must take the proper steps to guarantee that all workers—regardless of race, gender, or immigrant status—face safe and decent conditions on the job to minimize workplace injuries and illnesses. When those protections are not enough, it is critical that states ensure adequate benefits to workers and their families to be distributed in a timely fashion.” 

Drawing on data from surveys of workers’ compensation agencies from all 50 states and the District of Columbia, as well as from A.M. Best and the National Council on Compensation Insurance, this is the only report of its kind. As has been true since 1997, the report is available free-of-charge to researchers and students, state and federal agencies, workers’ rights and employer advocates, and others. Additional source data are available upon request for a fee. Please contact Griffin Murphy, at [email protected]. 

Griffin Murphy
National Academy of Social Insurance
202-243-7284
[email protected]

Jennifer Wolf
Minnesota Workers’ Compensation Insurers’ Association
952-897-6444
[email protected]

Source: National Academy of Social Insurance