Workers Compensation Benefits Decline as Percent of Payroll

Article excerpt

WASHINGTON (JR) -- Workers compensation benefit payments and costs declined relative to wages in 1997 and 1998, according to a new report recently by the National Academy of Social Insurance, marking the sixth consecutive year of declining benefits relative to wages.

In 1998, total workers compensation benefit payments were $41.7 billion. These payments were for medical care and cash benefits for workers with injuries or illnesses caused on the job.

Total costs to employers in 1998 were $52.1 billion. Costs to employers are the premiums they pay to buy workers compensation insurance. When employers self-insure, costs are benefits plus administrative expenses.

The benefits and costs -- not adjusted for inflation -- were slightly higher in 1998 than their 1997 levels of $40.6 billion in benefits and $52 billion in costs. When adjusted for the growing size of the work force and the rising wages of covered workers, however, benefits and costs continued to decline from their all- time highs in 1992 and 1993.

As a share of payroll, benefits declined by 35 percent between 1992 and 1998, from 1.66 to 1.08 percent of payroll, while employer costs declined by 38 percent between 1993 and 1998, or from 2.17 to 1.35 percent of payroll.

John F. Burton Jr., of Rutgers University and chair of the study panel that oversees the project, the declining costs reflect a variety of changes, many of which were likely prompted by reactions to rapidly rising costs in the 1980s and early 1990s. …