What are the Top 5 Trends in Workers’ Compensation?

1. SAFER WORK ENVIRONMENT

Businesses have been working harder to maintain a safe workplace by improving their risk management plans and creating a safety-oriented culture. This has decreased the chances of employees getting a workplace injury and reduced the amount of workers’ compensation claims resulting from workplace accidents. Creating a proactive safety environment saves money and creates a more positive work environment in the long run!

2. MEGA CLAIMS

Extremely large, or “mega,” workers’ comp claims involve very serious on-the-job injuries or illnesses and typically total $3 million or more in incurred losses. In addition to these claims having a lasting impact on employees, businesses can incur steep court costs, lost time, and the potential for reputational damage.

According to a 2020 countrywide workers’ comp report, sectors hit the hardest during the past few years by these types of mega claims were construction ($10 million and higher), office and clerical ($5 million to $10 million), and manufacturing, stores and dealers, transportation, and all other industries ($3 million to $5 million). The most common mega claims involved head/brain and neck/spine injuries and injuries involving multiple parts of the body.

In 2021, workers’ comp losses are likely to increase in both frequency and severity. According to the Insurance Research Council (IRC), key drivers of mega claims can be largely attributed to social inflation — a growth in liability risks and costs related to litigation trends — leading to a rise in claims and losses that ultimately result in more expensive insurance for businesses and consumers. Given this upward trajectory, it will be critical to proactively identify potential areas of risk with your business clients and to adjust risk mitigation strategies.

3. THE RISE IN COMORBIDITIES

The rising concern of comorbidities has also become a recent workers’ compensation trend. A comorbidity is the presence of two or more medical diagnoses for an individual at the same time. 

Comorbid conditions are typically long-term health complications that have the potential to increase the severity of other injuries or illnesses that the affected individual may experience, making it more difficult to fully recover. Common comorbid conditions include obesity, diabetes, hypertension, depression, anxiety, and substance abuse. 

According to a study conducted by the NCCI, workers’ compensation claims involving comorbidities have nearly tripled since 2000. Further, the average cost of workers’ compensation claims connected to a comorbid condition is almost twice as much as that of comparable claims that don’t involve comorbidities.  

This increase in workers’ compensation costs is likely tied to the often complex, long-term nature of claims that involve comorbidities. After all, individuals who have comorbid conditions typically take longer to heal from an injury, are more prone to develop additional complications due to an injury and are even at an increased risk of being left permanently disabled by an injury.  

To combat the potential impact of comorbidities, many employers have found success by implementing wellness initiatives. In other words, if your organization takes the time to address chronic health conditions and improve the overall well-being of your staff, you could reduce the severity of workers’ compensation claims and maintain low comorbidity rates overall.

4. THE CONCERN OF KEY LABOR TRENDS

In recent years, filling jobs with experienced workers has been a challenge for organizations across industry lines due to ongoing labor shortages. As a result, many employers have begun hiring a larger number of inexperienced workers. However, such a practice comes with workers’ compensation risks.  

In fact, according to a recent survey conducted by the Golden Triangle Business Roundtable in Texas, employees with less than five years of experience contribute to 43% of overall workplace injuries. This is likely because inexperienced workers often lack years of safety training and may be more willing to take unnecessary risks.  

In addition to a rise in inexperienced employees, the past decade has also brought on an aging workforce. According to the U.S. Bureau of Labor Statistics, the share of employees over the age of 55 in the labor force is expected to increase to nearly 25% by 2024 (up from 21.7% in 2014). Such a statistic is notable, as the cost of workers’ compensation claims generally increases as employees age. After all, because health typically diminishes with age, the impact of minor injuries can be more severe for older workers—taking them longer to fully recover.  

Furthermore, age-related changes and declines can include a shorter memory, slower reaction times, a decline in vision and hearing, or a poor sense of balance. These limitations can lead to many injuries for older workers, including falls caused by poor vision or a slowed reaction time, sprains and strains due to a loss of strength or balance, and injuries from repetitive tasks. 

These trends emphasize how crucial it is for your organization to promote a safe working culture and prioritize injury prevention. Specifically, be sure to conduct routine safety training for all employees and implement effective workplace safety policies. 

5. THE RESULTS OF MEDICAL MARIJUANA LEGALIZATION

Following the 2020 election results, medical marijuana is now legal in 37 states including Alabama, and recreational marijuana is now legal in 15 states. In response, your organization will need to review changes to Alabama’s legislation and adjust your workers’ compensation program accordingly. The law now called the Darren Wesley ‘Ato’ Hall Compassion Act, will allow patients to receive certification by a doctor to obtain a medical cannabis card for about 15 categories of conditions and symptoms and valid for up to 12 months.:

Autism; cancer-related weight loss, or chronic pain; Crohn’s; depression; epilepsy or condition causing seizures; HIV/AIDS-related nausea or weight loss; panic disorder; Parkinson’s; persistent nausea not related to pregnancy; PTSD; sickle cell; spasticity associated with diseases including ALS and multiple sclerosis, and spinal cord injuries; terminal illnesses; Tourette’s; chronic pain for which conventional therapies and opiates should not be used or are ineffective. 

In terms of medical marijuana, very few prescription drugs that are approved by the U.S. Food and Drug Administration (FDA) and contain marijuana exist on the market. And because doctors are only permitted to prescribe FDA-approved drugs, the actual prescription of medical marijuana for treatment is rare.

They could be tablets, capsules, tinctures, or gel cubes for oral use. They could be gels, oils or creams for topical use. They could be suppositories, transdermal patches, nebulizers, or liquids or oils for use in an inhaler.

Raw plant material, products that could be smoked or vaped, or food products such as cookies or candies would not be allowed.