Benefits as a share of payroll declined in 36 states, with the largest percentage decreases occurring in Michigan and Oklahoma where benefits as a share of payroll declined by over 10% in 2016. (Photo: Shutterstock)
Workers' compensation benefits as a share of payroll declined in 2016, continuing a five-year trend, according to Workers' Compensation: Benefits, Coverage, and Costs, a new report from the National Academy of Social Insurance.
Despite the growing economy and increased employment, the experiences of individual states vary considerably with the nation as a whole.
The disparity in workers' comp
Nationally, workers' compensation benefits fell to $0.83 per $100 in 2016 from $0.86 per $100 of covered payroll in 2015, a decrease of 3.5% and the lowest level since 1980.
Benefits as a share of payroll declined in 36 states, with the largest percentage decreases occurring in Michigan and Oklahoma where benefits as a share of payroll declined by over 10% in 2016. In contrast, 15 states experienced increases in workers' compensation benefits as a share of payroll in 2016, with the largest percentage increases occurring in Wyoming and Iowa where benefits per $100 of payroll increased by more than 5%.
"Workers' compensation programs are administered by the states, without mandates or regulations from the federal government, so part of the variation in benefits as a share of payroll reflects differences among the state systems," Marjorie Baldwin, professor at Arizona State University W.P. Carey School of Business and co-author of the report, said in a statement.
Other key findings
- Workers' compensation costs to employers fell for the third year in a row at the national level, from $1.33 per $100 of covered payroll in 2015 to $1.30 in 2016 — a decrease of 2.3%
- More than two-thirds of states experienced an annual decline in employer costs as a share of payroll, and 14 jurisdictions had a decline of 5% or more.
- The largest percentage decreases were in the District of Columbia (24%) and Texas (14.3%).
Workers' Compensation: Benefits, Costs, and Coverage is the 21st in an annual series. The full report can be found on the National Academy of Social Insurance's website.
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