Post-recession, workers’ comp costs may rise
Although the recession may have caused workers’ compensation costs to decline for employers, experts warn increased rates could be coming up.
According to the National Academy of Social Insurance’s annual workers’ comp report, released last August, employers’ costs declined 7.9 percent in 2009 and the number of covered workers fell 4.4 percent.
“As one might expect, when the Great Recession hit, employers paid less in workers’ compensation costs because there were fewer workers to cover,” report oversight panel chair John Burton Jr. said in a press release when the report was issued.
However, the National Council on Compensation Insurance Inc., a Boca Raton, FL-based provider of workers’ comp and employee injury data, filed for workers’ comp rate increases in 27 states.
Peter Burton, the senior division executive for state relations at NCCI, said the increases were the result of three factors:
- For the first time in 12 years, there was an increase in lost-time claim frequency.
- Because the economy is recovering, albeit slowly, employers are hiring more employees, who are likely to be less experienced and more likely to be injured.
- Injured workers are living longer due to improvements in treatment.
The end effect on employers will be high costs for workers’ comp insurance, leading NCCI’s Burton to suggest employers take steps to ensure their workers stay safe and avoid injuries.
“Now with workers’ compensation potentially becoming more costly to purchase, this is a time to really focus on workplace safety,” he said.