Workers' Comp Benefits, Costs Rose Slightly in 1998

Workers' compensation benefit payments and costs declined relative\r\nto wages in 1997 and 1998, according to a report released by the\r\nNational Academy of Social Insurance.

Workers'' compensation benefit payments and costs declined relative to wages in 1997 and 1998, according to a report released by the National Academy of Social Insurance (NASI).

This marked the sixth consecutive year of declining benefits relative to wages.

In 1998, total workers'' compensation benefit payments were $41.7 billion. These payments were for medical care and cash benefits for workers with injuries or illnesses caused on the job.

The report, "Workers'' Compensation: Benefits, Coverage, and Costs, 1997-1998, New Estimates" contains information for 1997 and 1998.

NASI, a Washington, D.C., nonprofit and nonpartisan research organization, has continued to publish the data series maintained until 1995 by the Social Security Administration. NASI''s last report covered 1996.

Total costs to employers in 1998 were $52.1 billion. Costs to employers are the premiums they pay to buy workers'' compensation insurance.

The benefits and costs were slightly higher in 1998 than their 1997 levels of $40.6 billion in benefits and $52.0 billion in costs.

When adjusted for the growing size of the workforce and the rising wages of covered workers, however, benefits and costs continued to decline from their all-time highs in 1992 and 1993.

Measured as a percent of payroll, workers'' compensation costs have fallen in recent years, the report said.

In 1993, the cost per $100 of payroll was $2.17. In 1997, it was $1.46 and in 1998, the cost was $1.35. In 1997, the cost of a covered employee was $442, and in 1998 it was $431. The cost in 1996 was $483.

John F. Burton Jr., of Rutgers University and chair of the Academy Study Panel that oversees the project, explained, "The declining costs reflect a variety of changes, many of which were no doubt prompted by reactions to rapidly rising costs in the 1980s and early 1990s."

According to Burton, "Causes of the decline in benefits and costs probably include: fewer accidents, improvements in the operation of workers'' compensation programs, the active management of medical care, more effective return-to-work programs, and tightening of eligibility for workers'' compensation benefits."

by Virginia Sutcliffe

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