Comp Benefits, Costs Continue Decline in '99

By Martin, Melissa | Occupational Hazards, August 2001 | Go to article overview

Comp Benefits, Costs Continue Decline in '99


Martin, Melissa, Occupational Hazards


The strong economy in 1999 helped workers' compensation benefit payments and costs decline relative to wages paid to employees covered by workers' comp, according to a report released by the National Academy of Social Insurance (NASI). This marks the seventh consecutive year of declining benefits and the sixth consecutive year of reduced employer costs.

According to Workers' Compensation: Benefits, Coverage and Costs, 1999 New Estimates and 1996-1998 Revisions, the share of wages paid to employees covered by workers' comp benefits declined by 38 percent between their peak in 1992 and 1999, from 1.69 percent to 1.05 percent of wages. Likewise, employer costs declined by 41 percent between their highest point in 1993 and 1999, from 2.17 percent to 1.29 percent of wages.

The economy in 1999 brought an increase nationally in the number of workers covered by workers' compensation and in their total wages. The number of workers grew by 2.5 percent from 120.9 million in 1998 to 123.9 million in 1999, while their wages grew by 6.6 percent.

John F. Burton Jr., professor of labor studies and employment relations at Rutgers University and chair of the academy study panel that oversees the project, explained, "While increasing payrolls resulting from the strong economy in 1999 contributed to a decline in national costs and benefits relative to wages, other long-term trends are also at work."

Other reasons for the decline, according to Burton, appear to include fewer accidents, the active management of medical care, more efficient return-to-work programs and tightening of eligibility for workers' compensation benefits. Many of these changes were adopted in response to the rapidly rising costs in the late 1980s and early 1990s. …

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