Workers' Compensation: Coverage, Benefits, and Costs, 1992-93

Article excerpt

Benefit payments and employer costs under workers' compensation programs in the United States experienced both growth and decline during the 1991-93 period. Benefits were $42.2 billion in 1991, $44.7 billion in 1992, and $42.9 billion in 1993 (table 1). The 1992 figure represented a 5.9 percent increase over the amount in 1991, while in 1993, there was a 3.9 percent decrease from 1992. Payments in 1993 were only $756 million higher than those in 1991--a 2-year increase of 1.8 percent.

Employer costs of providing workers' compensation benefits declined by $224 million from 1991 through 1992 to $55 billion, and then increased to $57.3 billion in 1993. The increase over the 2-year period, 1991-93, was 3.8 percent. Employee coverage increased from 93.6 million workers in 1991 to 94.6 million in 1992, and to 96.1 million in: 1993, reflecting the growth in the work force during this period.

Workers' compensation programs provide medical and hospital care, and income-maintenance protection to workers whose disabilities are the result of work-related injuries or illnesses. The income-maintenance benefits are intended as partial replacement for lost wages. The programs also provide survivor benefits to the dependents of deceased workers whose deaths result from job-related accidents and/or occupational diseases. Before the enactment of workers' compensation laws, an injured worker could recover damages only if he or she could establish that the incident was due to the negligence of the employer. Currently, proof of employer negligence is not a prerequisite for benefit payment.

The Federal Act of 1908 was the first workers' compensation law in the United States. This legislation provided limited benefits for certain Federal employees engaged in hazardous work. By 1911, workers' compensation legislation had been enacted in nine States and, by 1920, all but seven States had established such programs. However, it was not until 1949 that all States had programs to furnish income-maintenance protection, Today, workers' compensation consists of separate programs in 50 States and the District of Columbia, and 2 Federal programs: the Federal Employees' Compensation Act, covering civilian Federal Government employees; and the Longshore and Harbor Workers' Compensation Act, covering longshore, harbor, and other maritime workers.(1)

In addition, the Federal Black Lung program, a specialized workers' compensation program, protects coal miners with pneumoconiosis ("black lung" disease). Under this program, enacted into law in 1969, monthly cash benefits are payable to miners disabled by black lung disease and to their dependents or survivors. Medical benefits are also payable for diagnosis of pneumoconiosis and treatment for conditions resulting from the disease. Claims filed prior to July 1973, are paid from general revenues under a program administered by the Social Security Administration (SSA); claims filed after that date are paid from a Department of Labor-administered trust fund financed mainly by an excise tax on coal.

The total amount of benefits received under workers' compensation programs and the Social Security Disability Insurance (DI) program is limited by a Social Security Act offset provision. Under this provision, a reduction in the disabled worker's benefit (and in family benefits based on the worker's earnings record) may be made for any month to fully or partially offset a worker's compensation benefit received for the same month. This reduction is made only if the total benefits payable to the worker (and dependents) under the Social Security Act, plus those paid to the worker as workers' compensation, exceed the higher of 80 percent of his or her "average current earnings" before onset of disability or the family's total Social Security benefit before the reduction. The disabled worker's benefit will not be reduced if the workers' compensation law provides for the reduction of that benefit when he or she is entitled to disabled-worker's benefits, if such provision was in effect as of February 1991. …