The 100th anniversary of workers' compensation will not passunnoticed. The Workers' CompensationCentennial Commission (WCCC) was formed earlier this year tocelebrate this milestone and to be a resource for those interestedin the evolution of workers' compensation in this country.

As part of its mission, the organization is gatheringinformation on the past, present, and future of workers'compensation and posting the resource material online. Included inits library is a notice that appeared in the Racine (Wis.) DailyJournal in 1911, describing the outcome of the first officialworkers' compensation death claim, filed less than three weeksafter the passage of the May 3, 1911, law. The decision, made bythe Wisconsin Industrial Commission, marked the first workers'compensation award in America.

In its entirety, the article reads: "The first decision in thestate workingmen's compensation act was won by the city onWednesday when it was decided that Milwaukee would not have to pay$3,000 for the death of one of its employees. The case is expectedto be a precedent.

F.A. Windfelder, bridgetender, asked $3,000 for the death of hisson, killed on May 20 on Sixth street visduot bridge. He wasworking under the bridge while it was raised. The bascule waslowered and he was killed by the counterweights.

C.H. Crownhart, chairman of the industrial insurance commission,disposed of the case by giving an order to the city to pay $100 forfuneral expenses and $2 for medical assistance, the amount whichhas to be paid in any case."

Nine Out of Ten Americans Protected

By 1920 all but eight states had enacted similar laws; by 1949,every state had a workers' compensation system. (Currently, theonly state in which workers' compensation coverage is trulyoptional is Texas, where about one-third of the state's employersare so-called non-subscribers.)

Today, about nine out of 10 American workers are protected byworkers' compensation. The financial impact on employers, carriers,and medical providers is significant.

A December report from the InsuranceInformation Institute (III), citing a study by the National Academy of Social Insurance(NASI), put the payments for medical care and cash benefits thathelp cover lost wages at $57.6 billion in 2008 (the latestavailable data). NASI also noted that, "For the first time, butreflecting a long-term growth trend in medical spending for thepast 30 years, medical benefits totaled more than half of allbenefits paid, driven by an 8.8 percent increase in payments formedical care."

Downward Trend for Employer Costs andProfits

Additional data showed that while payments for medical care andcash benefits rose in 2008, employes costs moved slightly downwardin the same time period. The NASI report revealed that, "Overall,employers' costs declined by 6.7 percent to $78.9 billion. Per $100of payroll, the basis for computing workers' compensation, employercosts in 2008 were $1.33, a 0.11 percent decrease from the previousyear. Cash benefits to workers per $100 of payroll dropped 0.01percent to $0.48. This is the lowest level since 1980."

An A.M. Best study on 2009premiums, also referenced in the III report, noted a drop inpremiums but an increase in loss ratio: "Workers' compensationpremiums for 2009 dropped 14.5 percent to $12.3 billion, the lowestlevel in 10 years, while the combined ratio, the percentage of eachpremium dollar spent on claims and expenses, rose 8.8 percentagepoints to 120 percent. The deterioration in profitability wasdriven by a continuous decrease in premiums as poor economicconditions reduced the number of people in work force and intensecompetition for business reduced prices for coverage."