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Employers facing higher workers’ compensation costs

On Behalf of | Oct 12, 2016 | Workers' Compensation

The workers’ compensation costs borne by employers in New Jersey and around the country are increasing even while the amount paid in benefits continues to fall, according to a report released by the National Academy of Social Insurance. The nonprofit organization says that workers’ compensation benefits for each $100 of payroll fell from 97 cents in 2013 to 91 cents in 2014. According to NASI, benefits as a percentage of payroll have been falling for more than 25 years and have now reached levels not seen since 1980.

The fall in benefits comes at a time when more Americans are working thanks to an improving economy, but rising reimbursement payments, insurance premiums and administrative costs are preventing employers from reaping the financial benefits of improved workplace safety. The amounts paid by employers exceeded total benefits by almost $30 billion in 2014, and employer costs per $100 of payroll grew to $1.35.

The report also indicates that the costs associated with providing medical treatment to injured workers are rising rapidly. Medical expenses made up only 29 percent of the benefits paid out in 1980, but these costs accounted for half of all benefit payments in 2014, according to the NASI report. A NASI representative said that the 2014 workers’ compensation figures could be the result of fewer workplace accidents or workers returning to their jobs more quickly after suffering an injury.

Fears of rising administrative costs and soaring insurance premiums could prompt employers to contest the workers’ compensation claims made by their employees. Attorneys with a background in this area may argue on behalf of injured workers when their employers claim that accidents were not work-related or injuries are being exaggerated. Accusations of malingering are not uncommon in these situations, and experienced workers’ compensation attorneys could help injured workers to gather the medical documentation necessary to counter these arguments.