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Employer comp costs, benefits trend downward: Study

Employer comp costs, benefits trend downward: Study

Workers compensation employer costs and benefits as a share of payroll declined in 2015, according to a new report from the National Academy of Social Insurance released Wednesday.

The report provides data on state and federal workers comp programs in 2015. 

The growth in employment and an increase in employees covered by workers comp resulted in benefits per $100 of payroll dropping from 92 cents in 2014 to 86 cents in 2015. Between 2011 and 2015, benefits as a share of payroll fell in most states. The biggest declines happened in Illinois, Oklahoma and West Virginia due to major changes in these states’ workers comp systems during this period, according to the report. 

There was an increase in employer costs per $100 of covered payroll in 24 states, and 27 states saw a decrease. The largest reductions happened in West Virginia, Montana and Oklahoma, with costs dropping more than 30 cents per $100 of covered payroll. In Wyoming, Delaware and California, employer costs increased by more than $0.20 cents, according the report. 

“Part of the story behind the decline in benefits and costs as a share of payroll is that workplaces are getting safer,” Marjorie Baldwin, Tempe, Arizona-based professor at Arizona State University and co-author of the report, said in a statement. “Both the incidence and severity of work-related injuries have declined steadily since 1990. In fact, according to the Department of Labor, the proportion of workers who experienced injuries that resulted in days away from work reached a 25-year low in 2015,” she said. 


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