Workers’ compensation benefits as a share of payroll declined for the fifth year in a row, while employer costs as a share of payroll fell for the third straight year, according to a new report from the National Academy of Social Insurance (NASI). However, this downward trend is at the national level and the results of individual states varied dramatically.
Nationally, workers’ compensation benefits fell from $0.86 per $100 of covered payroll in 2015 to $0.83 in 2016, a decrease of 3.5% and the lowest level since 1980. Benefits as a share of payroll declined in 36 states and in 19 of those states, benefits fell by more than 5%. Just this past month, Delaware, Idaho, Kansas, Kentucky, Indiana, and North Carolina announced reductions in workers’ compensation rates. We’re not done yet – Florida is considering a 13.4% decrease.
OK TO GO
However, 15 states experienced increases in workers’ compensation benefits as a share of payroll in 2016. The largest increases were in Wyoming and Iowa, with an increase of more than 5%. Workers’ compensation costs to employers increased in 14 states between 2015 and 2016, with the largest increase in New York at 4.6%.
THE BOTTOM LINE
Overall, benefits as a share of payroll declined by almost 50% between 1991 and 2016, according to the new study. NASI determined this most likely reflects a combination of factors, including declining frequency and legislative changes, but could have been greater if not for the substantial increase in medical costs. In 2016, almost half of the $61.9 billion in workers’ compensation benefits were medical benefits paid to health care providers.
Rethinking Autonomous Vehicles
The U.S. National Highway Traffic Safety Administration (NHTSA) is seeking comments to guide a new series of autonomous vehicle test projects in which the agency could temporarily lift rules that pose barriers to those tests. The agency also plans to propose and seek comment on changes to existing vehicle safety standards to allow for new automated vehicle designs, such as removing a steering wheel or foot pedals.
Ford will begin testing self-driving cars in Washington, DC, early next year. District officials are pushing Ford to meet the new standards on cybersecurity, safety, and pollution. Still stalled in the Senate, a bipartisan bill introduced last year that would block local governments from regulating the design, construction, or performance of autonomous cars.
Making Our Way Around the Country
The National Transportation Safety Board (NTSB) called on the National Highway Traffic Safety Administration (NHTSA) to write standards for devices allowing police to test drivers for drugs on the roadside and to give states additional guidance on how to combat drug-impaired driving. The NHTSA has been attempting to address the issue and has held public meetings on the issue in Seattle, Baltimore, and Nashville. The NTSB called on NHTSA to create specification for an “oral fluid” drug test that can be applied consistently across state lines. A new study by the Insurance Institute for Highway Safety found that traffic accidents are rising in states that have legalized recreational marijuana.
The Pennsylvania Legislature passed a bill to fix a 2017 state Supreme Court decision that struck down the use of impairment rating evaluations (IREs), which have been estimated to save employers $300 million in lower insurance costs. The Legislature also passed a bill related to the Uninsured Employers Guaranty Fund, which covers medical and wage benefits for insured workers whose employers do not have workers’ compensation coverage. Both bills are now with Gov. Tom Wolf for consideration.
With the scariest day of the year just around the corner, we just wanted to send a reminder to be extra cautious on Halloween. According to the National Safety Council, children are more than twice as likely to be hit by a car and killed on Halloween than on any other day of the year. Slow down, enjoy the costumes, and if you’re around my house, beware of the spooky pumpkins.