An annual study conducted by the National Academy of Social Insurance revealed workers compensation cost and benefits took a sharp downturn during the first year of the COVID-19 pandemic, while reporting at the state level uncovered a stark contrast in results.
Data compiled by the academy ran over a five-year period from 2016 to 2020 and highlighted trends and outcomes in workers compensation benefits, costs and coverage.
In a statement issued by NASI, Jennifer Wolf, chair of the study panel on workers compensation data and president of the Minnesota Workers’ Compensation Insurers Association, said the publication provides unique insights for policymakers and researchers within compensation programs.
Not only did COVID-19 impact employment and social insurance systems, “[T]he pandemic placed pressure on workers compensation and other disability benefit programs to keep households afloat,” she added.
Over the first three years of the study, total benefits paid went up 0.5% but backpedaled 6.5% during the first year of the pandemic, resulting in a cumulative drop of 6% over the study period.
Throughout the five years covered by the study, total benefits paid slipped from $62.7 billion in 2016 to $58.9 billion in 2020. Over the same time, cash benefits remained stable while medical benefits fell an overall 12%, including an 11.4% nosedive in the first year of the pandemic.
Standardized indemnity and medical benefits — benefits paid per $100 of covered wages — were also on the decline during the study, tumbling 14.5% and 24.8%, respectively, to create a 19.6% drop in total standardized benefits.
This article was first published in Business Insurance.
