An annual study conducted by the National Academy of Social Insurance revealed that workers’ compensation costs and benefits took a sharp decline during the first year of the COVID-19 pandemic, while state-level reporting revealed a stark contrast in results.
Data compiled by the academy spanned a five-year period from 2016 to 2020 and highlighted trends and outcomes in workers’ compensation benefits, costs and coverage.
In a statement from NASI, Jennifer Wolf, chair of the Workers’ Compensation Data Study Panel and president of the Minnesota Workers’ Compensation Insurers Association, said the publication provides unique insights for compensation program policymakers and researchers.
Not only did covid-19 affect the employment and social security systems, “[T]the pandemic put pressure on workers’ compensation and other disability benefit programs to keep households afloat, she added.
In the first three years of the study, total claims increased by 0.5% but declined by 6.5% in the first year of the pandemic, resulting in a cumulative decrease of 6% over the study period.
Over the five years covered by the study, total claims fell from $62.7 billion in 2016 to $58.9 billion in 2020. During the same period, cash benefits remained stable while medical benefits fell by a total of 12%, including an 11.4% nosedive during the first year of the pandemic.
Standardized compensation and medical benefits — benefits paid per $100 of covered wages — also fell during the study, falling 14.5% and 24.8%, respectively, to create a 19.6% drop in total standardized benefits.
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