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Workers' compensation coverage falls in recession economy

According to a study of workers' compensation costs and the number of employees covered by workers' compensation released by the National Academy of Social Insurance earlier this month, 2009 saw a decline in workers' compensation benefits distribution in the U.S. According to EHS Today, 2009 is the most recent year with complete information on workers' compensation. The number of employees covered by workers' compensation declined by 4.4 percent from 2008 to 2009. Interestingly, the cost to employers covering employees declined by a higher 7.6 percent over the same time period.

One of the overseers of the project said that the lower numbers were due to the lower number of employees during the recent recession. The report was very comprehensive and according to the data, more than 120 million individuals received workers' compensation in 2009. Employers spent a total of $58.3 billion on workers' compensation in 2009 among the 120 beneficiaries. While this number may seem large, employers paid an even larger sum to workers' compensation insurance companies: $73.9 billion.

Medical care benefits for those that required medical attention after being injured at work decreased by 1.1 percent, but benefits paid in cash increased by 1.9 percent. This means that compensated workers had more money in hand but had less to spend on their medical bills. When combined into one large number, employees covered by workers' compensation insurance lost 4.7 percent of their wages.

According to the report, roughly 4,500 fatal accidents were reported in 2009, a 12.7 percent decrease. Rates concerning workplace injuries that require time off were cut in half over the past 17 years, decreasing from 3.0 workers out of 100 in 1992 to 1.1 out of 100 in 2009. Some may speculate that underreporting may be to blame for this information.

Source: EHS Today, "Rising Unemployment Rates Lead to Decrease in Workers' Comp Coverage, Costs," Laura Walter, Aug. 17, 2011

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