It is almost impossible to navigate today’s world without mention of the economy—inflation, rising cost of goods, shifting and shuffling employment, etc. So with all this talk about the economy, how is workers’ compensation affected?
To begin, let’s look at workers’ compensation trends since the start of the pandemic. In 2020, workers’ compensation claims (excluding COVID) fell by almost 8% following industry shutdowns, massive layoffs, and a shift to remote work. As employees returned to work and others entered new fields in 2021, workers’ compensation claims rose again. With 2020 and 2021 figures combined, workers’ compensation claim numbers saw a 1% decrease overall.
The COVID-19 pandemic appeared to have a smaller impact on the workers’ compensation industry than projected with about 60,000 virus-related claims in 2020 and 2021. Still, the lingering effects of the pandemic on the economy have repercussions for workers’ compensation benefits.
The National Council on Compensation Insurance (NCCI) surveyed workers’ compensation insurance executives to gather insights into industry futures and found the experts were focused on four main areas of impact:
- Rate adequacy—”Carriers are focused on ongoing loss cost decreases, driven primarily by declining frequency across all areas and categories, and their ultimate impact on premium levels.”
- COVID impacts—”Even as the pandemic appears to be subsiding in some areas, the potential for new variants and longer-term impacts reverberate, creating a significant shift in the industry landscape.”
- Shifting workforce—”With so many dynamics at play, the workforce and workplace of tomorrow contain more unknowns than at any time in recent memory.”
- Rising medical costs—”Even with new efficiencies such as telemedicine gaining popularity, the outlook for medical inflation is problematic for the industry.”
Another potential impact factor: wage inflation. With the sheer speed at which these economic shifts occurred, there is bound to be seismic shifts between wages, benefits, and premiums.
No matter how the industry shakes out due to the ever-changing economic landscape, an experienced workers’ compensation attorney can navigate the process for you. Our priority at Poirier Law Firm is to keep up-to-date on the latest workers’ compensation trends and rulings so we can serve as your best resource in the event you suffer from an injury or illness while on-the-job.
Sources:
Why Wage Inflation Matters in Workers Comp
An Evolving Landscape for Workers Compensation: Industry Executives Share Their Top Concerns
Inflation spurs record decline in workers’ wages and benefits
Claims Frequency Up for 2021, but Workers’ Comp Profitability ‘Unprecedented’
Workers’ compensation rate reductions well outpace hikes in Q1 | S&P Global Market Intelligence