Workers' compensation and the aging workforce
The costs of workers’ compensation claims increase with age.
People are living longer than ever these days. The World Health Organization (WHO) reports that by the year 2050, the population of those aged 60 and older will total two billion. 2015, by comparison, had an aging population of 900 million. As for the future, experts estimate that many babies born in 2012 who live in wealthier countries should live to see their one-hundredth birthday.
These additional years mean people today are enjoying a variety of opportunities the generations before them may have missed. This includes spending more time on their passions and pursuing their goals, continuing their education or working past retirement age.
Working past retirement age
The Pew Research Center reports that in 2023, roughly one-in-five, or 19% of Americans age 65 were employed in 2023. This is nearly double the number of older Americans who were working 35 years ago. Americans ages 75 and older are the fastest-growing age group in the workforce with 9% employed today. This is also double the number working 35 years ago.
Why are older adults continuing to work? Pew points to several factors that contribute to the growing number of older adults who continue to work. These factors include higher education levels, better health, and less disability, retirement plans have evolved, policy changes now discourage early retirement and there is a wider range of jobs that are less physically strenuous.
Working past retirement age provides health benefits, too. Working longer keeps people more active, intellectually stimulated, and socially connected. Work can continue to provide meaning to their lives and gives their emotional health a much-needed boost.
The impact of the aging workforce on workers’ compensation
The years ahead will represent a transitional period for the U.S. workforce. Employers may wonder what impact an older workforce has on workers’ compensation rates. AmTrust Financial’s Matt Zender, Senior Vice President of Workers’ Compensation Strategy, says “As the proportion shifts towards older workers, evidenced by a near doubling of the percentage of workers aged 55-64 and a near tripling of workers 65 and older during the period between 1996 and 2026, we need to remain diligent as an industry and as employers to meet the changing needs of this demographic.”
The costs of workers’ compensation claims increase with age
Physical changes that come with aging can affect one’s health – changes that are completely unrelated to activities or injuries that occur within the workplace. Older workers tend to have more pre-existing health conditions than their younger counterparts, such as joint pain from arthritis, decreased range of motion, and loss of muscle strength and flexibility. These conditions can make strenuous physical labor such as bending, lifting, carrying, pushing, etc., more difficult, and increase the likelihood of injury. Injuries may not just be more likely but also may be more severe when they occur. This severity results in higher medical costs and higher costs for workers’ compensation claims. Employers should consider giving older adults what the National Bureau of Economic Research calls age-friendly jobs such as guide, insurance salesperson, proofreader, and financial manager.
Older workers are slower to return to work following an injury
An older employee who has suffered an injury may take longer to recover and therefore, take longer to return to the workforce.
To help decrease the amount of time spent away from the job, which allows employees to ease back into the workplace while also keeping their workers’ compensation costs lower, an employer should consider implementing a return-to-work program, Modifying the duties of injured employees allows them to get back on the job while they continue to recover, easing their financial stress and keeping their skill sets sharp.
Matt Zender serves as senior vice president, workers’ comp strategy at AmTrust Financial.
The piece was originally published on AmTrust Financial’s blog and has been reprinted here with permission.