July 22, 2005 – Employer premiums for workersâ€™ compensation are rising at a rate far higher than payouts for employee claims, according to a comprehensive and groundbreaking report released yesterday.
The study, "Workersâ€™ Compensation: Benefits, Coverage, and Costs, 2003," was conducted by the National Academy for Social Insurance (NASI). It found that employer costs for insurance under the state-run programs rose at over three times the rate of combined medical and compensatory claims payouts made to workers between 2000 and 2003, the last year for which full data is available.
Between 2001 and 2002, employer costs jumped 17 cents per every $100, and from 2002 to 2003 they increased again by 12 cents per $100. During the same periods, payouts to employees under the government enforced insurance system rose by only eight cents and one cent respectively.
In total, insurance costs rose by 3.9 percent since 2000, as payouts rose by 1.2 percent, the study found.
Recently, several states have altered Workersâ€™ Compensation insurance rates.
The New York State Insurance Commissioner approved a five percent average rate increase last week, the Associated Press reports. And in South Carolina, the insurance industry group that helps set rates proposed a 33 percent increase.
Meanwhile, a California Workersâ€™ Compensation committee approved a 5.2 percent decrease in statewide Workersâ€™ Comp insurance rates and Illinois Governor Rod Blagojevich signed legislation into law raising payments to injured workers and holding down employee costs, according to news accounts.
NASI is a nonprofit social insurance research and advocacy organization. The study was funded by a combination of government, business and foundation monies.