The number of paid workers’ compensation claims fell 43% relative to the number of employees from 1997 to 2010, the 2010 “Minnesota Workers’ Compensation System Report” released Tuesday by the Minnesota Department of Labor and Industry shows.
The report says the workers’ compensation claim rate fell to 4.9 claims per 100 full-time-equivalent employees in 2010 from 8.7 in 1997.
Department Commissioner Ken Peterson said the report “underscores that Minnesota’s workplaces have become much safer for employees and comparatively less costly for employers since 1997.”
Peterson added that “as has been the case for the past few years, medical treatment for injuries was the chief cost driver for the system, increasing annually per claim by more than 5% above average wages since 1997.”
The report also shows that the 2010 total workers’ compensation system cost was $1.25 per $100 of payroll, the lowest since 1997.
Because of the falling claim rate, total benefits, including medical, cash and rehabilitation, fell 6% relative to payroll between 1997 and 2010, the report notes in its executive summary. Medical care accounted for the largest share of total system cost at 35%.
The total cost of Minnesotaâ€™s workersâ€™ compensation system was an estimated $1.33 billion for 2010, or $1.25 per $100 of payroll — the lowest since 1997.
In 2010, on a current-payment basis, the three largest components of total workers’ compensation system costs were medical benefits (35%), insurer expenses (31%) and indemnity benefits other than vocational rehabilitation (30%).
Pure premium rates for 2012 were down 27% from 1997, their lowest level since that year.
Adjusting for average wage growth, medical benefits per insured claim rose 90% from 1997 to 2009, while indemnity benefits rose 34%. All of the increases for indemnity benefits occurred by 2003, the report says.
The average 2009 workersâ€™ compensation claim cost $9,080 for medical and indemnity benefits combined (including vocational rehabilitation).
Relative to payroll, indemnity benefits were down 14% between 1997 and 2010, while medical benefits were approximately the same, the department says. “This reflects the net effect of the falling claim rate and higher benefits per claim,” the report comments.
Medical and indemnity benefits (including vocational rehabilitation) amounted to $0.87 per $100 of payroll for 2010.
The report says that “by counteracting the increasing trend in benefits per claim, the falling claim rate has kept system cost per $100 of payroll at historically low levels.”
From 1997 to 2010, after adjusting for average wage growth, paid indemnity claims showed:
— Total disability benefits rose 20%.
— Temporary partial disability benefits fell 15%.
— Permanent partial disability benefits fell 31%.
— Stipulated benefits rose 87% (stipulated benefits include indemnity, medical and vocational rehabilitation benefits).
Claims with stipulated benefits made up 24% of paid indemnity claims for 2010, up from 17% for 1997.
In vocational rehabilitation:
— The participation rate increased from 15% to 23% of paid indemnity claimants from 1997 to 2010.
— The average service cost per participant was $8,830 for 2010, 25% higher than 1998 after adjusting for average wage growth.
Vocational rehabilitation accounted for an estimated 3.0% of total workers’ compensation system costs in 2010.
Twenty-one percent of paid indemnity claims for 2010 had one or more disputes of any type, an increase from 16% in 1997.
“The leading components of this increase were medical disputes, up 92%, and vocational rehabilitation disputes, up 69%,” the report says.
The percentage of paid indemnity claims with claimant attorney involvement rose 41% during the same period.
The total number of dispute resolutions at the department rose 27% from 1999 to 2011. Most resolutions at the department areÂ by agreement among the parties.
“At the Office of Administrative Hearings since 2001, the numbers of settlement conferences, discontinuance conferences and medical and rehabilitation conferences have fallen, but the number of hearings has shown little net change,” the report comments.
Source:Â Minnesota Department of Labor and Industry, WorkCompCentralShare