Workers' compensation insurance always has been a significant
cost of doing business, but according to a recent study by the
National Academy of Social Insurance (NASI), you're paying more now
than ever before.
NASI studied workers' compensation data from 2003 (the most
recent data available) and discovered employers' costs for the
insurance grew faster than the combined cash benefits for injured
workers and medical treatment. The trend began in 2000, when
workers' compensation costs and benefits relative to wages were at
their lowest point during the past 15 years.
"The fact that employer costs rose faster than payments for
benefits and medical care reflects broader developments in the
insurance industry," says John Burton Jr., study panel chairman and
professor at Rutgers University, New Brunswick, N.J. "Employer
costs reflect rising premiums insurers charge to cover future
benefit costs. The recent rise in costs appears to be part of a
longer cycle of ups and downs in the insurance market."
According to NASI, total workers' compensation payments to
injured workers rose 3.2 percent, but employers' costs for workers'
compensation rose 9.6 percent. When compared with aggregate wages
of workers, payments rose just 1 cent for every $100 of wages in
2003. However, costs to employers (which include premiums and
administrative costs) rose 12...
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