Workers’ Compensation

Workers' Compensation:

Benefits, Coverage, and Costs

October 2017

Washington, DC

Board of Directors William M. Rodgers III, Chair Ren?e M. Landers, Vice Chair Christopher W. O'Flinn, Treasurer

Marty Ford, Secretary

G. Lawrence Atkins Robert A. Berenson

Ngina Chiteji Harry Conaway Cecilia Conrad Indivar Dutta-Gupta Jason Fichtner Howard Fluhr Alexander W. Hertel-Fernandez G. William Hoagland Kilolo Kijakazi Shaun C. O'Brien Maya Rockeymoore Rebecca Vallas

Founding Chair Robert M. Ball

Chief Executive Officer William J. Arnone

The National Academy of Social Insurance (the Academy) is a non-profit, non-partisan organization made up of the nation's leading experts on social insurance. Social insurance encompasses broad-based systems that help workers pool risks to avoid loss of income due to retirement, death, disability, or unemployment, and to ensure access to health care. The mission of the Academy is to advance solutions to challenges facing the nation by increasing public understanding of how social insurance contributes to economic security. The Academy convenes steering committees and study panels that are charged with conducting research, issuing findings, and, in some cases, making recommendations based on their analyses. Members of these groups are selected for their recognized expertise in a particular area of social insurance, and with due consideration for the balance of disciplines and perspectives appropriate to the project.

This research report presents data on trends in workers' compensation benefits, costs, and coverage as of 2015. The report was prepared with the guidance of the Study Panel on Workers' Compensation Data and, in accordance with procedures of the Academy, has been reviewed for completeness, accuracy, clarity, and objectivity by a committee selected by the Board of Directors. The purpose of the report is to present the data and describe trends over time, but not to make policy recommendations.

The Social Security Administration provides partial funding to support the collection, processing, and validation of data for this report. The data are also used in tables for its Annual Statistical Supplement to the Social Security Bulletin. The Centers for Medicare & Medicaid Services provide funding to produce selected tables for this report that are also used in its own estimates. The project also receives financial support from the Office of Workers' Compensation Programs in the U.S. Department of Labor and in-kind support from the National Council on Compensation Insurance and the National Association of Insurance Commissioners.

? 2017 National Academy of Social Insurance ISBN: 1-884902-66-9

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Washington, DC 20036 Telephone (202) 452-8097 Facsimile (202) 452-8111

Twitter: @socialinsurance

Workers' Compensation:

Benefits, Coverage, and Costs,

(2015 data)

by Christopher F. McLaren and Marjorie L. Baldwin with advice from the Study Panel on Workers' Compensation Data

October 2017

Washington, DC

Preface

Workers' compensation provides funding for medical care, rehabilitation, and cash benefits for workers who are injured on the job or who contract workrelated illnesses. The program also pays benefits to families of workers who die of work-related injuries or illnesses. Unlike most other U.S. social insurance programs, workers' compensation programs are regulated by the states, with no federal financing or administration. The federal government provides workers' compensation insurance for federal employees and for workers in some high-risk industries, but no federal laws set standards for workers' compensation plans or require comprehensive reporting of workers' compensation data.

The lack of uniform reporting of states' experiences with workers' compensation makes it difficult to provide national estimates of amounts of benefits paid, costs to employers, and numbers of workers covered. In order to produce national summary statistics on the program, it is necessary to piece together data from various sources.

Until 1995, the U.S. Social Security Administration (SSA) produced the only comprehensive national data on workers' compensation benefits, costs, and coverage, with annual estimates dating back to 1946. SSA discontinued the series in 1995 and the National Academy of Social Insurance (the Academy) assumed the task of reporting national data on workers' compensation in 1997. The Academy published its first report that year and has produced the report annually ever since.

This is the Academy's 20th annual report on workers' compensation benefits, costs, and coverage. This report presents new data on workers' compensation programs for 2015 and updated estimates for 20112014. The revised estimates in this report replace estimates in the Academy's prior reports.

The Academy and its expert advisors are continually seeking ways to improve the report and to adapt estimation methods to track new developments in workers' compensation programs. Detailed descriptions of the methods used to produce the estimates in this report are available online at research/workers-compensation.

Despite the Academy's continued efforts to improve the quality of its estimates, there are limitations to the data that we acknowledge in the report. It is important to note that our estimates of workers' compensation costs borne by employers, do not capture the full economic and human costs of workrelated injuries, illnesses, and fatalities. These costs ? borne by workers, families and communities ? are significant but are beyond the scope of the report. Additionally, our estimates do not evaluate whether workers' compensation programs are meeting key objectives to prevent injuries and diseases, compensate disabled workers adequately and equitably, and to rehabilitate injured workers and return them to work at an affordable cost.

The audience for the Academy's annual report on workers' compensation includes insurers, journalists, business and labor leaders, employee benefit specialists, actuaries, federal and state policymakers, and researchers working in universities, government, and private consulting firms. The data from some tables are published by the National Safety Council (NSC) (in Injury Facts), by the Employee Benefit Research Institute (in Employee Benefit News, Fundamentals of Employee Benefit Programs) and by the SSA (in the Annual Statistical Supplement to the Social Security Bulletin).

The Academy's estimates inform state and federal policymakers in numerous ways. The federal Centers for Medicare & Medicaid Services (CMS), for example, use the data in estimates and projections of health care spending in the United States. The National Institute for Occupational Safety and Health (NIOSH) uses the data to track the costs of workplace injuries in the United States. The International Association of Industrial Accident Boards and Commissions (IAIABC), the organization of state and provincial agencies that administer workers' compensation in the United States and Canada, uses the information to track and compare the performance of workers' compensation programs in the United States with similar systems in Canada.

Acknowledgements

The Academy expresses its deep appreciation to staff members in the 50 states and District of Columbia

Workers' Compensation: Benefits, Coverage, and Costs ? i

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