New report shows cost of workers’ compensation dropped during global economic crisis

Workers Comp RatesIn 2009, at the start of the global economic crisis, there was a decrease of 4.4 percent in the number of employees who had workers’ compensation coverage.

According to a National Academy of Social Insurance report, this drop was the largest in twenty years. The result was that the cost to employers for providing the benefits decreased by 7.6 percent, reaching $73.9 billion that year; which is the most recent year with complete data. This drop closely mirrors the overall decline in employment in the country.

According to the chair of the panel which oversaw the report, John F. Burton, Jr., “when the Great Recession hit, employers paid less in workers’ compensation costs because there were fewer workers to cover.”

He explained that while the decrease in the cost to employers is the most significant in twenty years, there was actually an overall increase of 0.4 percent in benefits, reaching $58.3 billion, which partially reflects those provided in that year to workers who had been injured in earlier years.

In 2009, the total number of injured workers rose within the District of Columbia and 23 states, while they fell in 27 states, when compared to the statistics from 2008. Medical care payments also fell for the first time in ten years, reaching $28.9 billion after dropping by 1.1 percent. Health care does continue to make up about 50 percent of all benefits provided through workers’ compensation.

In 2009, the total amount paid by employers for workers’ compensation was $73.9 billion, across the country. This was the equivalent of $1.30 per $100 of payroll, which is the smallest it has been in three decades.

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