A new study released by the National Association of Social Insurance (NASI) shows that the cost of workers’ compensation benefits continues to fall, despite the fact that employer costs continue to rise.
According to the study, workers’ comp benefits per $100 of payroll fell from $0.97 in 2013 to $0.91 in 2014, making it the lowest level it’s been since 1980. However, employer costs associated with workers’ comp—things like insurance premiums, reimbursement payments and administrative costs—have steadily increased over the past five years. According to the report, employer costs exceeded total benefits by $29.5 billion in 2014, and costs per $100 of payroll reached $1.35.
Experts suggest that the reason for the disparity stems from the recession of 2008. As employers have begun hiring more employees during the economic recovery of the past five years, workers’ comp costs spiked immediately. The cost savings associated with a low benefit payout may take some time to be reflected in lower employer costs.