Workers' comp benefits, costs continue to decline as a share of payroll

Despite the five-year decline, the experiences of individual states vary considerably with the nation as a whole.

Benefits as a share of payroll declined in 36 states, with the largest percentage decreases occurring in Michigan and Oklahoma where benefits as a share of payroll declined by over 10% in 2016. (Photo: Shutterstock)

Workers’ compensation benefits as a share of payroll declined in 2016, continuing a five-year trend, according to Workers’ Compensation: Benefits, Coverage, and Costs, a new report from the National Academy of Social Insurance.

Despite the growing economy and increased employment, the experiences of individual states vary considerably with the nation as a whole.

Related: Workers’ comp mega claims impact industry

The disparity in workers’ comp

Nationally, workers’ compensation benefits fell to $0.83 per $100 in 2016 from $0.86 per $100 of covered payroll in 2015, a decrease of 3.5% and the lowest level since 1980.

Benefits as a share of payroll declined in 36 states, with the largest percentage decreases occurring in Michigan and Oklahoma where benefits as a share of payroll declined by over 10% in 2016. In contrast, 15 states experienced increases in workers’ compensation benefits as a share of payroll in 2016, with the largest percentage increases occurring in Wyoming and Iowa where benefits per $100 of payroll increased by more than 5%.

Workers’ compensation programs are administered by the states, without mandates or regulations from the federal government, so part of the variation in benefits as a share of payroll reflects differences among the state systems,” Marjorie Baldwin, professor at Arizona State University W.P. Carey School of Business and co-author of the report, said in a statement.

Related: Workers’ comp motor vehicle accident frequency on the rise

Other key findings

Workers’ Compensation: Benefits, Costs, and Coverage is the 21st in an annual series. The full report can be found on the National Academy of Social Insurance’s website.

Related: People, places and things: The future of workers’ compensation