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Digital EditionNASI Report Offers Insight to COVID-19 Impacts on Workers’ Compensation
The COVID-19 pandemic was a disruptive event for workers’ compensation systems across the United States, according to the National Academy of Social Insurance’s 26th annual Workers’ Compensation report, which provides an in-depth look at benefits, costs and coverage during a five-year study period spanning 2017-2021.
The report indicates that total workers’ compensation benefits paid increased in 2021, compared to the first year of the pandemic, but decreased when standardized for the size of payroll. Similarly, total and standardized employer costs also decreased. Between 2020 and 2021, standardized benefits paid and employer costs decreased in every jurisdiction except Hawaii, with Washington, D.C. and Rhode Island experiencing the largest decreases respectively.
“Public health measures to reduce the transmission of COVID-19 caused significant economic contraction in 2020. However, covered jobs and wages rebounded somewhat in 2021 as the economy adapted to the pandemic,” the report noted. “Workers’ compensation benefits and employer costs tended to increase between 2020 and 2021, reflecting strong increases in both covered jobs and wages in the pandemic’s second year. However, standardized benefit and cost measures (i.e., per $100 of covered payroll) tended to decrease between 2020 and 2021, although at slower rates than before the pandemic.”
Jennifer Wolf, Chair of the Study Panel on Workers’ Compensation Data and President, Minnesota Workers’ Compensation Insurers Association, emphasized the importance of the report, stating, “This report provides further evidence of the impact of the COVID-19 pandemic on workers’ compensation, which is a critical component of our social insurance system.”
The report also highlights that the number of U.S. jobs covered by workers’ compensation decreased by 0.1% between 2017 and 2021, primarily due to the pandemic’s impact in 2020. However, covered jobs made strong gains from 2020 to 2021.
Covered wages continued to grow despite the pandemic. Covered wages grew by 22.0% between 2017 and 2021, and the increase from 2020 to 2021 (9.2%) alone was similar to the 2017-2019 period change (9.9%), the study found.
In 2021, total workers’ compensation benefits paid were $60.0 billion, a 4.3% decrease from 2017. However, benefits increased by a small percentage through 2019, then decreased by 4.8% from 2019 to 2021, with an increase of 1.1% from 2020 to 2021.
Total employer costs decreased over the study period, despite a noticeable increase in total costs between 2020 and 2021. In 2021, employer costs for workers’ compensation were $96 billion, up 4.4% compared to 2020 but still down relative to 2017.
Employers’ costs per $100 of covered wages were $1.01 in 2021, a decrease of $0.30 (22.9%) from 2017. The percentage decrease between 2020 and 2021 was much smaller than in prior years.
The report provides valuable data and insights into the changes within workers’ compensation programs during the pandemic and the subsequent recovery period. It underscores the need for states to ensure adequate benefits for workers and their families, particularly in times of crisis.
“As we prepare for the next crisis, states must take the proper steps to guarantee that all workers—regardless of race, gender, or immigrant status—face safe and decent conditions on the job to minimize workplace injuries and illnesses. When those protections are not enough, it is critical that states ensure adequate benefits to workers and their families to be distributed in a timely fashion,” stated Bill Arnone, CEO of the Academy.
As the pandemic continues to shape the economic landscape, the data presented in the report will be crucial for policymakers, researchers, and advocates in their efforts to improve the system for both injured workers and employers.
To obtain the full report, visit the NASI website. &
