Workers’ Compensation - National Academy of Social …€¦ · · 2017-01-10Workers’...

Workers’Compensation:

Benefits, Coverage, and Costs,

2004

July 2006

Washington, DC

The National Academy of Social Insurance is a nonprofit, nonpartisanorganization made up of the nation’s leading experts on social insurance.Its mission is to conduct research and enhance public understanding ofsocial insurance, develop new leaders, and provide a nonpartisan forumfor exchange of ideas on important issues in the field of social insurance.Social insurance, both in the United States and abroad, encompassesbroad-based systems for insuring workers and their families against eco-nomic insecurity caused by loss of income from work and the cost ofhealth care. The Academy’s research covers social insurance systems suchas Social Security, Medicare, workers’ compensation and unemploymentinsurance, and related social assistance and private employee benefits.

The Academy convenes steering committees and study panels that arecharged with conducting research, issuing findings and, in some cases,reaching recommendations based on their analyses. Members of thesegroups are selected for their recognized expertise and with due considera-tion for the balance of disciplines and perspectives appropriate to theproject. The findings and any recommendations are those of the StudyPanel and do not represent an official position of the National Academyof Social Insurance or its funders.

This research report presents new data and does not make recommenda-tions. It was prepared with the guidance of the Workers’ CompensationSteering Committee and the Study Panel on National Data on Workers’Compensation. In accordance with procedures of the Academy, it hasbeen reviewed by a committee of the Board for completeness, accuracy,clarity, and objectivity.

This project received financial support from the Social SecurityAdministration, the Centers for Medicare & Medicaid Services, and the Office of Workers’ Compensation Programs of the U.S. Departmentof Labor. It also received in-kind support in data from the NationalCouncil of Compensation Insurance, and the National Association ofInsurance Commissioners.

© 2006 National Academy of Social Insurance

ISBN: 1-884902-46-4

Board of Directors

Lawrence H. ThompsonChair

Marilyn Moon President

Margaret C. Simms Vice President

Janet L. Shikles Secretary

Richard A. HobbieTreasurer

John F. Burton, Jr.Kathleen A. Buto Jack. C. Ebeler

Jennie Chin HansonJerry L. MashawMark Novitch

Patricia M. OwensJoseph F. Quinn

Anna M. RappaportWilliam E. Spriggs

Andrew Stern

Founding Chair

Robert M. Ball

Executive Vice PresidentPamela J. Larson

VP for Income SecurityVirginia P. Reno

VP for Health PolicyPaul Van de Water

1776 Massachusetts Ave., NWSuite 615

Washington, DC 20036-1904Telephone (202) 452-8097Facsimile (202) 452-8111

E-mail [email protected]: www.nasi.org

Workers’Compensation:

Benefits, Coverage, and Costs,

2004

by

Ishita Sengupta, Virginia Reno, and John F. Burton, Jr.

with advice of the

Study Panel on National Data on

Workers’ Compensation

and the

Steering Committee on Workers’ Compensation

July 2006

Washington, DC

Workers’ Compensation: Benefits, Coverage, and Costs, 2004 • i

Because workers’ compensation statutes are enactedand administered at the state level, it is difficult toget a complete picture of national developments.Until 1995, the U.S. Social Security Administration(SSA) produced the only comprehensive nationaldata on workers’ compensation benefits and costs.For more than four decades, the research office ofSSA filled part of the void in workers’ compensationdata by piecing together information from varioussources to estimate the number of workers coveredand, for each state and nationally, the aggregate ben-efits paid. SSA discontinued the series in 1995 afterpublishing data for 1992–93.

The SSA data on workers’ compensation were avaluable reference for employers, insurance organiza-tions, unions, and researchers, who relied on them asthe most comprehensive and objective informationavailable. Users of the data turned to the NationalAcademy of Social Insurance as a reliable and inde-pendent source to continue and improve upon thedata series. The need to continue the series remainsparticularly urgent as workers’ compensation pro-grams are changing rapidly.

In February 1997, the Academy received start-upfunding from The Robert Wood JohnsonFoundation to launch a research initiative in work-ers’ compensation with its first task to develop meth-ods to continue the national data series. Funding tocontinue the project came from the Social SecurityAdministration, the Centers for Medicare &Medicaid Services, the Department of Labor, theLiberty Mutual Insurance Company, the Workers’Compensation Research Institute, and the LaborManagement Group. In addition, the NationalCouncil on Compensation Insurance provides accessto important data for the project. Without supportfrom these sources, continuing this vital data serieswould not be possible.

To set its agenda and oversee its activities in workers’compensation, the Academy convened the Workers’Compensation Steering Committee, listed on pageiii. The Study Panel on National Data on Workers’Compensation, listed on page iv, provides technicalexpertise for the data report.

This is the ninth report the Academy has issued onworkers’ compensation national data. In December

1997, it published a report that extended the dataseries through 1995. Jack Schmulowitz, a retiredSSA analyst, prepared the report and provided theAcademy with full documentation of the methodsused to produce the estimates. Subsequent reportspublished by the Academy through 2005 extendedthe data series through 2003. Those reports used thesame basic methodology followed in prior reportsbut incorporated several innovations. In particular,the Academy reports:

■ Provide state-level information separating med-ical and cash benefits;

■ Place workers’ compensation in context withother disability insurance programs;

■ Compare the recent trends in the benefitspending for workers’ compensation to thosefor Social Security disability insurance;

■ Discuss the relative advantages and drawbacksof using calendar year benefits paid vis-à-visaccident year incurred losses to measure benefittrends;

■ Estimate benefits paid under deductible provi-sions for individual states;

■ Present state-level estimates of the number ofcovered workers and total covered wages;

■ Report estimates of benefits relative to totalwages in each state;

■ Provide information on special federal pro-grams that are similar to workers’ compensa-tion, but are not included in national totals inthe Academy’s series;

■ Compare trends in workers’ compensationclaims frequency for privately insured employ-ers with trends in incidence of work-relatedinjuries reported by private employers to theBureau of Labor Statistics;

■ Update estimates for the past five years ofworkers’ compensation benefits, costs, and cov-erage in each report; and

■ Provide more complete documentation ofmethods for collecting data and estimating cov-erage, deductibles, and self-insured benefits andcosts.

This data report benefited from the expertise ofmembers of the Study Panel on National Data on

Preface

ii NATIONAL ACADEMY OF SOCIAL INSURANCE

Workers’ Compensation, who gave generously oftheir time and knowledge in advising on data sourcesand presentation, interpreting results, and carefullyreviewing the draft report. We would like to especial-ly acknowledge Barry Llewellyn, Senior DivisionalExecutive and Actuary with the National Council onCompensation Insurance, Eric Nordman, Director ofResearch, National Association of InsuranceCommissioners, Greg Krohm, Executive Director,International Association of Industrial AccidentBoards and Commissions, and Allan Hunt, Assistant

Executive Director, W.E. Upjohn Institute, who pro-vided the Academy with data and their considerableexpertise on many data issues. This report also bene-fited from helpful comments during Board review by Christine Baker, Paul Cullinan and Paul Van deWater.

John F. Burton, Jr.Chair, Study Panel on National Data on Workers’Compensation

Workers’ Compensation: Benefits, Coverage, and Costs, 2004 • iii

Robert Steggert, ChairVice President of CasualtyClaims, Marriott International,Inc.

H. Allan Hunt, Vice ChairAssistant Executive DirectorW.E. Upjohn Institute

James N. Ellenberger, Vice ChairFormer Deputy CommissionerVirginia EmploymentCommission

Christine BakerExecutive OfficerCalifornia Commission on Health and Safety andWorkers' Compensation

Marjorie BaldwinProfessor, W.P. Carey School of Business, School ofHealth Management and Policy,Arizona State University

Peter S. BarthProfessor of Economics,Emeritus, University ofConnecticut

Keith BatemanVice President, Workers'Compensation, PropertyCasualty Insurers Association of America

Leslie BodenProfessor, School of PublicHealth, Boston University

John F. Burton, Jr.Professor Emeritus Labor Studies & EmploymentRelations, School ofManagement & Labor RelationsRutgers University

Ann ClaytonConsultant on Workers’Compensation

Shelby HallmarkDirector, Office of Workers’Compensation ProgramsU.S. Department of Labor

Jay S. Himmelstein, M.D.Director, Robert Wood JohnsonFoundation, Workers'Compensation Health InitiativeCenter for Health Policy andResearch, University ofMassachusetts Medical School

William JohnsonProfessor of Economics, W.P.Carey School of Business Schoolof Health Management andPolicy, Arizona State University

Frederick W. KilbourneIndependent ActuaryThe Kilbourne Company

Kate KimpanAssociateDade Moeller & Associates

Gregory KrohmExecutive DirectorInternational Association ofIndustrial Accident Boards andCommissions

Barry LlewellynSenior Divisional Executive,Regulatory ServicesNational Council onCompensation Insurance, Inc.

Paul Mattera Senior Vice President and ChiefPublic Affairs OfficerLiberty Mutual Group

Eric NordmanDirector of ResearchNational Association ofInsurance Commissioners

Eric J. OxfeldPresident, UWC -StrategicServices on Unemploymentand Worker's Compensation

Tom RankinPast PresidentCalifornia Labor Federation,AFL-CIO

Robert RevilleDirector, Institute for CivilJustice, RAND

Emily A. SpielerDean and Edwin W. HadleyProfessor of Law, NortheasternUniversity School of Law

Allyn C. TatumVice President of ClaimsTyson Foods

Richard A. VictorExecutive DirectorWorkers' CompensationResearch Institute

Edward M. WelchDirector, Workers’Compensation CenterSchool of Labor and IndustrialRelations, Michigan StateUniversity

Steering Committee for Workers’ Compensation

iv NATIONAL ACADEMY OF SOCIAL INSURANCE

John F. Burton, Jr., ChairProfessor Emeritus Labor Studies & EmploymentRelations, School ofManagement & Labor RelationsRutgers University

Marjorie BaldwinProfessor, W.P. Carey School ofBusiness, School of HealthManagement and PolicyArizona State University

Peter S. BarthProfessor of Economics,Emeritus, University ofConnecticut

Keith BatemanVice President, Workers'CompensationProperty Casualty InsurersAssociation of America

Leslie BodenProfessor, School of PublicHealth, Boston University

Aaron CatlinEconomist, National HealthStatistics Group, Office of theActuary, Centers for Medicareand Medicaid Services

James N. EllenbergerFormer Deputy CommissionerVirginia EmploymentCommission

Shelby HallmarkDirector, Office of Workers’Compensation ProgramsU.S. Department of Labor

Jay S. Himmelstein, M.D.Director, Robert Wood JohnsonFoundation, Workers'Compensation Health InitiativeCenter for Health Policy andResearch, University ofMassachusetts Medical School

H. Allan HuntAssistant Executive DirectorW.E. Upjohn Institute

Kate KimpanAssociateDade Moeller & Associates

Gregory KrohmExecutive DirectorInternational Association ofIndustrial Accident Boards andCommissions

Katharine LevitSenior Research Leader,Thomson-Medstat

Barry LlewellynSenior Divisional Executive,Regulatory ServicesNational Council onCompensation Insurance, Inc.

Paul MatteraSenior Vice President and ChiefPublic Affairs OfficerLiberty Mutual Group

Eric NordmanDirector of ResearchNational Association ofInsurance Commissioners

Eric J. OxfeldPresident, UWC -StrategicServices on Unemploymentand Worker's Compensation

Robert RevilleDirector, Institute for CivilJustice, RAND

John RuserAssociate Director for RegionalEconomics, Bureau of EconomicAnalysis

Emily A. SpielerDean and Edwin W. HadleyProfessor of Law, NortheasternUniversity School of Law

Robert SteggertVice President of CasualtyClaims, Marriott International,Inc.

Richard A. VictorExecutive Director, Workers'Compensation Research Institute

Alex WasarhelyiProject Officer, Social SecurityAdministration

Benjamin WashingtonStatistician, National HealthStatistics Group, Office of theActuary, Centers for Medicareand Medicaid Services

Edward M. WelchDirector, Workers’Compensation CenterSchool of Labor and IndustrialRelations, Michigan StateUniversity

William J. WiatrowskiAssociate CommissionerOffice of Compensation &Working ConditionsU.S. Department of Labor,Bureau of Labor Statistics

Study Panel on National Data on Workers’ Compensation

Workers’ Compensation: Benefits, Coverage, and Costs, 2004 • v

Table of ContentsPreface . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . i

Highlights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Need for this Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Target Audience . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Workers’ Compensation and Other Disability Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Trends in Workers’ Compensation Benefits and Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Reasons for Trends in Workers’ Compensation Benefits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Overview of Workers’ Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Types of Workers’ Compensation Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Covered Employment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Coverage Rules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Method for Estimating Coverage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Changes in State Coverage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

Benefit Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

Method for Estimating Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Sources of Insurance Coverage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Trends in Deductibles and Self-Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Changes in State Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

Medical Payments in States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

State Benefits Relative to Wages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Employer Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

Trend in Benefit and Cost Ratios . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

Work Injuries, Occupational Illness and Fatalities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

Fatalities at Work . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

Nonfatal Injuries and Illnesses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

Workers’ Compensation Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

Comparing Workers’ Compensation with Other Disability Benefit Programs . . . . . . . . . . . . . . . . . . . 32

Other Disability Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

Social Security Disability Insurance and Medicare . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

Incurred Losses Compared with Benefits Paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

Glossary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39

Appendix A: Coverage Estimates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41

Appendix B: Questionnaire for State Agencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47

Appendix C: Data Availability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

Private Carrier Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

State Fund Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

Self-Insured Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

Medical Benefits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

Employer Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

Appendix D: Revised Data for 2000–2003 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53

Appendix E: Self-Insurer Benefit Estimates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63

Appendix F: Medical Benefit Estimates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65

Appendix G: Deductible Benefit Estimates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67

Appendix H: Federal Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69

vi NATIONAL ACADEMY OF SOCIAL INSURANCE

Tables

Table 1 Comparison of Workers’ Compensation Benefits, Coverage, and Costs,2003-2004: Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2

Table 2 Number of Workers Covered under Workers’ Compensation Programs and Total Covered Wages, 1989–2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9

Table 3 Number of Workers Covered by Workers’ Compensation and Total Covered Wages, By State, 2000- 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10

Table 4 Workers' Compensation Benefits, by Type of Insurer, 1987–2004 (in millions) . . . . . . . . .12

Table 5 Total Amount and Percentage Distribution of Workers’ Compensation Benefit Payments by Type of Insurer, 1990–2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14

Table 6 Estimated Employer-Paid Benefits under Deductible Provisions for Workers’ Compensation, (in millions), 1992–2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15

Table 7 Workers’ Compensation Benefits by State, 2000–2004 (in thousands) . . . . . . . . . . . . . . .18

Table 8 Workers' Compensation Benefits by Type of Insurer and Medical Benefits, by State, 2004 (in thousands) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20

Table 9 Medical, Cash, and Total Benefits, by State, 2003-2004 (in thousands) . . . . . . . . . . . . . . .22

Table 10 State Workers’ Compensation Benefits Per $100 of Covered Wages, by State, 2000-2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .24

Table 11 Employer Costs for Workers’ Compensation by Type of Insurer, 1987–2004 (in millions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27

Table 12 Workers’ Compensation Benefit and Cost Ratios, 1989–2004 . . . . . . . . . . . . . . . . . . . . .28

Table 13 Number of Fatal Occupational Injuries, 1992–2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .30

Table 14 Private Industry Occupational Injury and Illness: Total Non-fatal Cases and Incidence Rates, 1987–2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .31

Table 15 Number of Workers’ Compensation Claims per 100,000 Insured Workers: Private Carriers in Thirty-six Jurisdictions, 1992-2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . .32

Table 16 Social Security Disability Insurance (DI) Beneficiaries with Workers’ Compensation (WC) or Public Disability Benefit (PDB) Involvement, December 2005 . . . . . . . . . . . . . . .34

Table 17 Comparison of Accident-Year Incurred Losses with Calendar-Year Benefits Paid by Private Carriers and State Funds in Thirty-six States, 2000–2004 . . . . . . . . . . . . .36

Table A1 Documenting Workers’ Compensation Coverage Estimates, 2004 Annual Averages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .42

Table A2 Covered Payroll 1989-1999 (in millions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .44

Table C1 Workers’ Compensation Data Provided by States for 2004 . . . . . . . . . . . . . . . . . . . . . . . .51

Table D1 Workers’ Compensation Benefits by Type of Insurer and Medical Benefits, by State, 2003 (in thousands) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .54




Table E1 Self-Insurer Estimation Results, 1997–2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .63

Table H1 Federal Employees’ Compensation Act, Benefits and Costs, 1997–2004 (in thousands) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .70

Table H2 Longshore and Harbor Workers’ Compensation Act, Benefits and Costs, 1997–2004 (in thousands) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .70

Table H3 Black Lung Benefits Act, Benefits and Costs, 1997–2004 (in thousands) . . . . . . . . . . . . . .72

Table H4 Energy Employees Occupational Illness Compensation Program Act, Part B, Benefits and Costs, 2001-2004 (in thousands . . . . . . . . . . . . . . . . . . . . . . . . . . . . .72

Table H5 Radiation Exposure Compensation Act, Benefits Paid as of March 7, 2006 (benefits in thousands) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .74

Table H6 Federal Veterans’ Compensation Program, Compensation Paid in September, 2005 (benefits in thousands) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .74

Figures

Figure 1 Workers’ Compensation Benefits and Costs Per $100 of Covered Wages, 1989–2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3

Figure 2 Workers’ Compensation Medical and Cash Benefits per $100 of Covered Wages, 1989-2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4

Figure 3 Types of Disabilities in Workers’ Compensation Cases with Cash Benefits, 2001 . . . . . . . .7

Figure 4 Nature of Injury or Illness: Percent of Nonfatal Occupational Injuries and Illnesses Involving Days Away from Work, US Private Industry, 2004 . . . . . . . . . . . . . . . .30

Figure 5 Social Security Disability Insurance and Workers’ Compensation Benefits as a Percent of Wages, 1970-2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .35

Workers’ Compensation: Benefits, Coverage, and Costs, 2004 • vii

viii NATIONAL ACADEMY OF SOCIAL INSURANCE

HighlightsThe purpose of this report is to provide a benchmarkof the benefits and costs of workers’ compensation tofacilitate policy-making and comparisons with othersocial insurance and employee benefit programs.Workers’ compensation pays for medical care, reha-bilitation and cash benefits for workers who areinjured on the job or who contract work-related ill-nesses. It also pays benefits to families of workerswho die of work-related causes. Each state has itsown workers’ compensation program.

Need for this Report

The lack of uniform reporting of states’ experienceswith workers’ compensation makes it necessary topiece together data from various sources to developestimates of benefits paid, costs to employers, andthe number of workers covered by workers’ compen-sation. Unlike other U.S. social insurance programs,state workers’ compensation programs have no feder-al involvement in financing or administration. And,unlike private pensions or employer-sponsoredhealth benefits that receive favorable tax treatment,no federal laws set standards for “tax-qualified” plansor impose any reporting requirements. Consequent-ly, states vary greatly in the data they have availableto assess the performance of workers’ compensationprograms.

For more than forty years, the research office of theU.S. Social Security Administration producednational and state estimates of workers’ compensa-tion benefits, but that activity ended in 1995. Inresponse to requests from stakeholders and scholarsin the workers’ compensation field, the NationalAcademy of Social Insurance took on the challengeof continuing that data series. This is the Academy’sninth annual report on workers’ compensation bene-fits, coverage, and costs. This report presents newdata on developments in workers’ compensation in2004 and updates estimates of benefits, costs, andcoverage for the years 2000–2003. The revised esti-mates in this report replace estimates in theAcademy’s prior report, Workers’ Compensation:Benefits, Coverage, and Costs, 2003.

Target Audience

The audience for the Academy’s reports on workers’compensation includes journalists, business andlabor leaders, insurers, employee benefit specialists,

federal and state policymakers, and researchers inuniversities, government, and private consultingfirms. The data are published in the StatisticalAbstract of the United States by the U.S. CensusBureau; are used in the annual report of the NationalSafety Council, Injury Facts; are reported in EmployeeBenefit News, which tracks developments for humanresource professionals; and are reported inFundamentals of Employee Benefits by the EmployeeBenefit Research Institute. The U.S. Social SecurityAdministration publishes the data in its AnnualStatistical Supplement to the Social Security Bulletinand uses the findings in its estimates of nationalsocial welfare expenditures in the United States. Thefederal Centers for Medicare & Medicaid Servicesuse the data in their estimates and projections ofhealth care spending in the United States. TheNational Institute for Occupational Safety andHealth uses the data to track the cost of workplaceinjuries in the United States. In addition, theInternational Association of Industrial AccidentBoards and Commissions (the organization of stateand provincial agencies that oversee workers’ com-pensation in the United States and Canada) uses theinformation to track and compare the performanceof workers’ compensation programs in the UnitedStates with similar systems in Canada.

The report is produced under the oversight of theAcademy’s Steering Committee on Workers’Compensation and its expert Study Panel onNational Data on Workers’ Compensation, both ofwhich are listed in the front of this report. TheAcademy and its expert advisors are continually seek-ing ways to improve the report and to adapt estima-tion methods to new developments in the insuranceindustry and in workers’ compensation programs.

Workers’ Compensation andOther Disability Benefits

Workers’ compensation is an important part ofAmerican social insurance. As a source of support fordisabled workers, it is surpassed in size only by SocialSecurity disability insurance. Workers’ compensationprograms in the fifty states, the District ofColumbia, and federal programs paid $56.0 billionin benefits in 2004. Of the total, $26.1 billion werefor medical care and $29.9 billion were for cash ben-efits (Table 1).

Workers’ Compensation: Benefits, Coverage, and Costs, 2004 • 1

Workers’ compensation differs from Social Securitydisability insurance and Medicare in important ways.Workers’ compensation pays for medical care forwork-related injuries beginning immediately after theinjury occurs; it pays temporary disability benefitsafter a waiting period of three to seven days; it payspermanent partial and permanent total disabilitybenefits to workers who have lasting consequences ofdisabilities caused on the job; it pays rehabilitationand training benefits for those unable to return topre-injury careers; and it pays benefits to survivors ofworkers who die of work-related causes. SocialSecurity and Medicare, in contrast, pay benefits toworkers with long-term disabilities of any cause, butonly when the disabilities preclude work. SocialSecurity begins after a five-month waiting periodand Medicare begins twenty-nine months after theonset of medically verified inability to engage in

employment. In 2004, Social Security paid $78.2billion in cash benefits to disabled workers and theirdependents, while Medicare paid $43.8 billion forhealth care for disabled persons under age 65 (SSA2006 and CMS, 2005).

Paid sick leave, temporary disability benefits, andlong-term disability insurance for non-work-relatedinjuries or diseases are also available to some workers.About 70 percent of private sector employees havesick leave or short-term disability coverage, while 30percent have no income protection for temporaryincapacity other than workers’ compensation. Sickleave typically pays 100 percent of wages for a fewweeks. Long-term disability insurance that isfinanced, at least in part, by employers covers about30 percent of private sector employees and is usuallypaid after a waiting period of three to six months, or

2 NATIONAL ACADEMY OF SOCIAL INSURANCE

Table 1

Comparison of Workers’ Compensation Benefits*, Coverage, and Costs**, 2003-2004Summary

ChangeAggregate Amounts 2003 2004 In percent

Covered workers (in thousands) 124,685 125,863 0.9Covered wages (in billions) 4,717 4,953 5.0Workers’ compensation benefits paid (in billions) $ 54.7 $ 56.0 2.3

Medical benefits $25.5 $26.1 2.3Cash benefits $29.2 $29.9 2.3

Employer costs for workers’ compensation (in billions) $81.7 $87.4 7.0

Amount per $100 of covered Wages In amount

Benefits paid $1.16 $1.13 -$0.03Medical payments $0.54 $0.53 -$0.01Cash payments to workers $0.62 $0.60 -$0.02

Employer costs $1.73 $1.76 $0.03

* Benefits are payments in the calendar year to injured workers and to providers of their medical care.

** Costs are employer expenditures in the calendar year for workers’ compensation benefits, administrative costs, and/orinsurance premiums. Costs for self-insuring employers are benefits paid in the calendar year plus the administrative costsassociated with providing those benefits. Costs for employers who purchase insurance include the insurance premiumspaid during the calendar year plus the payments of benefits under large deductible plans during the year. The insurancepremiums must pay for all of the compensable consequences of the injuries that occur during the year, including the ben-efits paid in the current as well as future years.

Source: National Academy of Social Insurance estimates based on Tables 2, 8, 9, 11, 12 and D1.

after short-term disability benefits end. Long-termdisability insurance is generally designed to replace60 percent of earnings and is reduced if the workerreceives workers’ compensation or Social Securitydisability benefits.

Trends in Workers’ CompensationBenefits and Costs

In 2004, employers’ costs for workers’ compensationgrew faster than combined payments for cash bene-fits and medical treatment for injured workers. Totalcash benefits and medical payments were $56.0 bil-lion in 2004, an increase of 2.3 percent over the2003 amount of $54.7 billion (Table 1). At the sametime, employer costs rose to $87.4 billion from 81.7billion in 2003, an increase of 7.0 percent. For self-insured employers, costs are benefits plus administra-tive costs. For employers who buy insurance, costs

are payments for premiums and for benefits paidunder insurance policies with large deductibles.Premiums paid in a given year do not necessarilycorrespond to benefits paid in the year because pre-miums reflect future liabilities for injuries that occurin the year.

When measured relative to aggregate wages of cov-ered workers, the cost to employers rose by threecents per $100 of wages, to $1.76 in 2004 from$1.73 in 2003 (Table 1). In contrast, total workers’compensation payments to workers fell by threecents for every $100 of wages to $1.13 in 2004 from$1.16 in 2003 (Figure 1). The fall occurred in pay-ments for medical care, which fell from $0.54 to$0.53 per $100 of wages, and in cash benefits paidto injured workers, which fell from $0.62 to $0.60per $100 of wages in 2004 (Figure 2).


Benefits

Employer Costs2.042.18 2.16 2.162.12

2.05

1.82

1.66

1.491.38 1.33

1.461.57

1.65 1.61

1.38

1.68

1.51

1.261.18

1.11 1.10

$0.0

$0.50

$1.00

$1.50

$2.00

$2.50

Benefits

2004200320022001200019991998199719961995199419931992199119901989

1.301.40

1.601.73 1.76

1.06 1.101.16 1.16 1.13

Figure 1

Workers’ Compensation Benefits* and Costs** Per $100 of Covered Wages, 1989–2004

Source: National Academy of Social Insurance estimates.* Benefits are payments in the calendar year to injured workers and to providers of their medical care.** Costs are employer expenditures in the calendar year for workers' compensation benefits, administrative costs, and/or insurancepremiums. Costs for self-insuring employers are benefits paid in the calendar year plus the administrative costs associated with pro-viding those benefits. Costs for employers who purchase insurance include the insurance premiums paid during the calendar yearplus the payments of benefits under large deductible plans during the year. The insurance premiums must pay for all of the com-pensable consequences of the injuries that occur during the year, including the benefits paid in the current as well as future years.

During the extended time period shown in Figure 1,workers’ compensation costs relative to wages fellsteadily from 1993 to 2000, when workers’ compen-sation costs relative to wages were at their lowestpoint in the last 15 years. Since 2000 this measure ofcosts has been rising. Over the four-year period from2000-2004, employer costs per $100 of payroll roseby 46 cents, from $1.30 in 2000 to $1.76 in 2004.This measure of costs remains well below the peakfigure reached in 1990, when employer’s costs were$2.18 per $100 of payroll.

Benefits relative to wages were also at their lowestpoint in the last 15 years in 2000 and then increasedyearly until 2003, only to decline somewhat in 2004(Figure 1). Benefits per $100 of payroll were $1.13in 2004, well below the peak of $1.68 per $100 ofpayroll reached in 1992. Over the entire periodbetween 2000 and 2004, total payments on workers’behalf rose by 6 cents per $100 of payroll. Of that 6-cent increase, all went for an increase in medical pay-ments (Figure 2).

Reasons for Trends in Workers’Compensation Benefits

Fluctuations in payments for workers’ compensationover the last two decades are influenced by policy

developments and the role of workers’ compensationin the broader health care and disability income sys-tems. Opinions often differ about the main causes ofchanges in spending.

In the second half of the 1980s, workers’ compensa-tion benefits and costs grew at double-digit rates andpayments for medical treatment were a growingshare of total payments. Some believe that risingworkers’ compensation medical benefits and costsreflected cost-shifting away from employment-basedhealth insurance to workers’ compensation as theregular health insurance system introduced managedcare and other forms of cost controls in the 1980s(Burton, 1997).

The decline in workers’ compensation benefits in themid-1990s may have been caused by many factors.In response to rising workers’ compensation costs inthe late 1980s and early 1990s, employers and insur-ers expanded the use of disability management tech-niques with the aim of improving return-to-workrates for injured workers and lowering workers’ com-pensation costs. At the same time, workers’ compen-sation systems followed the general health care sys-tem in introducing managed care and other costcontrols to reduce the growth in medical spending.


$0.00

$0.20

$0.40

$0.60

$0.80

$1.00

$1.20

Cash

Medical

20022001200019991998199719961995199419931992199119901989

0.53

0.890.94

0.990.95

1.00

0.70

0.93

0.85

0.76

0.65 0.64 0.60 0.60 0.620.57 0.620.66 0.69 0.66

0.580.53

0.50 0.48 0.47 0.46 0.470.50 0.54

0.62

2003 2004

0.60

0.53

Figure 2

Workers’ Compensation Medical and Cash Benefits per $100 of Covered Wages, 1989-2004

Source: National Academy of Social Insurance estimates.

Business representatives believe that the adoption ofmore objective methods of rating permanent disabili-ty and controls against “doctor shopping” reducedclaimants’ incentive to seek additional medical carein order to strengthen their permanent disabilityclaims. On the other hand, worker representativesargue that a stricter adjudicative climate deterredlegitimate claims, while restrictions on workers’choice of their treating doctor made it more difficultto get legitimate claims documented and approved.

A decline in workplace accidents would also con-tribute to a decline in aggregate payments in the1990s. According to surveys by the Bureau of LaborStatistics (BLS), private employers have reportedfewer workplace injuries that result in days awayfrom work. The number of reported injuries or ill-nesses per 100 full-time workers declined from 3.0in 1992 to 1.7 in 2001. It further fell to 1.4 in 2004(U.S. DOL, 2005c). There is evidence that part ofthe decline in injury rates between 1991 and 1997,as measured in the BLS surveys, is the result oftighter eligibility standards and claims-filing restric-tions for workers’ compensation (Boden and Ruser,2003). Fewer cases reported to the workers’ compen-sation system could result in fewer injuries reportedin the BLS survey. The National Council onCompensation Insurance (NCCI) reports a declinein the frequency of workers’ compensation claimsduring the 1990s (NCCI, 2002b). These findingssuggest that workplaces are becoming safer.

In response to rapid growth in costs in the late1980s, some jurisdictions made legislative changesthat would reduce workers’ compensation payments,such as: (a) limiting compensability when a pre-exist-ing condition is involved; (b) stricter evidentiaryrequirements; (c) limiting compensability for partic-ular conditions, such as mental stress or cumulativetrauma disorders; (d) stricter rules for permanent dis-ability benefits; and (e) discouraging fraudulentclaims (Burton and Spieler, 2001). For older work-ers, in particular, it may be difficult to discern theextent to which a condition is directly related toevents on the job or to the cumulative impact ofaging and other life experiences. In this gray area,changes in rules or practices with regard to compens-ability could have a significant impact, especiallybecause a growing share of the workforce is over age50.

Interaction with other disability benefit programscould also affect overall system benefits and costs. Inthe 1980s, when workers’ compensation grew rapidlyas a share of covered wages, Social Security disabilitybenefits declined as a share of covered wages, follow-ing retrenchments in that program in the early1980s. On the other hand, in the 1990s, workers’compensation declined while Social Security disabili-ty benefits rose as a share of covered wages. Whilemost workers’ compensation recipients would not beeligible for Social Security because their disabilitiesare only temporary or partial, injured workers withsignificant long-term work incapacities might qualifyfor Social Security. A recent study finds that morethan one third (36 percent) of persons ages 51-61whose health limited the kind or amount of workthey can do became disabled because of an accident,injury, or illness at work. Of the subset of those dis-abled individuals who were receiving Social Securitydisability insurance, a similar portion (37 percent)said they were disabled because of an accident, injuryor illness at work. The study finds that workers whoattribute their disabling conditions to their jobs arefar more likely to be receiving Social Security disabil-ity insurance (29.0 percent) than to ever havereceived workers’ compensation (4.7 percent)(Reville and Schoeni, 2005). The interactionbetween workers’ compensation and Social Securitydisability insurance remains an important topic forfurther study.

While employer costs are affected by benefit pay-ments to workers, shifts in employer costs as a shareof payroll also reflect broader developments in theinsurance industry and financial markets. Thedecline in employer costs in the 1990s occurred asinsurance companies, spurred by favorable invest-ment returns, cut the premiums they chargedemployers in order to expand their market shares. Inthe mid- and late-1990s, high investment returnscontributed to profits in the workers’ compensationinsurance industry. After 2000, low interest rates andpoor stock market returns reversed that trend. Theworkers’ compensation insurance industry wasunprofitable in 2001 and 2002. Employer costs roseas insurance carriers raised premiums in order tocover anticipated future benefit costs. The workers’compensation insurance industry achieved profitabil-ity for the first time since 2000 in 2003 and prof-itability continued in 2004 (Yates and Burton,2005).


Overview of Workers’CompensationWorkers' compensation provides benefits to workerswho are injured on the job or who contract a work-related illness. Benefits include medical treatment forwork-related conditions and cash payments that par-tially replace lost wages. Temporary total disabilitybenefits are paid while the worker recuperates awayfrom work. If the condition has lasting consequencesafter the worker heals, permanent disability benefitsmay be paid. In case of a fatality, the worker’s depen-dents receive survivor benefits.

Germany enacted the first modern workers’ compen-sation laws, known as Sickness and Accident Laws,in 1884, following their introduction by ChancellorOtto von Bismarck (Clayton, 2004). The next suchlaws were adopted in England in 1897. Workers'compensation was the first form of social insurancein the United States. The first workers’ compensa-tion law in the United States was enacted in 1908 tocover certain federal civilian workers. The first statelaws were passed in 1911. The subsequent adoptionof state workers’ compensation programs has beencalled a significant event in the nation’s economic,legal, and political history.

These laws were adopted throughout the nation,despite the great efforts required to reach agreementsbetween business and labor on the specifics of thebenefits to be provided and on which industries andemployers would have to provide these benefits.Today, each of the fifty states and the District ofColumbia has its own program. A separate programcovers federal civilian employees. Other federal pro-grams provide benefits to coal miners with blacklung disease, longshore and harbor workers, employ-ees of overseas contractors with the U.S. govern-ment, certain energy employees exposed to haz-ardous material, workers engaged in the manufactur-ing of atomic bombs, and veterans injured on activeduty in the armed forces.

Before workers' compensation laws were enacted, aninjured worker's only legal remedy for a work-relatedinjury was to bring a tort suit against the employerand prove that the employer's negligence caused theinjury. At the time, employers could use three com-mon-law defenses to avoid compensating the worker:assumption of risk (showing that the injury resulted

from an ordinary hazard of employment); the fellowworker rule (showing that the injury was due to afellow-worker's negligence); and contributory negli-gence (showing that, regardless of any fault of theemployer, the worker's own negligence contributedto the accident).

Under the tort system, workers often did not recoverdamages and always experienced delays or high costswhen they did. While employers generally prevailedin court, they nonetheless were at risk for substantialand unpredictable losses if the workers’ suits weresuccessful. Litigation created friction betweenemployers and workers. Ultimately, both employersand employees favored legislation to insure that aworker who sustained an occupational injury or dis-ease arising out of and in the course of employmentwould receive predictable compensation withoutdelay, irrespective of who was at fault. As a quid proquo, the employer's liability was limited. Under theexclusive remedy concept, the worker accepts work-ers' compensation as payment in full and gives upthe right to sue.

Workers' compensation programs are designed andadministered by the states. They vary across states interms of who is allowed to provide insurance, whichinjuries or illnesses are compensable, and the level ofbenefits. Generally, state laws require employers toobtain insurance or prove they have the financialability to carry their own risk (self-insure).Workers' compensation is financed almost exclusive-ly by employers, although economists argue thatworkers pay for a substantial portion of the costs ofthe program in the form of lower wages (Leigh et al.,2000). The premiums paid by employers are basedin part on their industry classifications and the occu-pational classifications of their workers. Manyemployers are also experience-rated, which results inhigher (or lower) premiums for employers whosepast experience demonstrates that their workers arepaid more (or less) benefits than those of workers forsimilar employers in the same insurance classifica-tion. The employers’ costs of workers’ compensationcan be affected by other factors, such as deviations,schedule rating, and dividends (Thomason,Schmidle, and Burton, 2001). NCCI data indicatethat the size of these competitive pricing adjustmentsvaries over the course of the insurance underwritingcycle.


Types of Workers’Compensation BenefitsWorkers’ compensation pays for medical care imme-diately and pays cash benefits for lost work time aftera three to seven day waiting period. Most workers’compensation cases do not involve lost work timegreater than the waiting period for cash benefits. Inthese cases, only medical benefits are paid. “Medicalonly” cases are quite common, but they represent asmall share of benefit payments. Medical-only casesaccounted for 78 percent of workers’ compensationcases, but only 6 percent of all benefits paid, accord-ing to information about insured employers in thir-ty-eight states for policy years spanning 1998–2001(NCCI, 2003a). The remaining 22 percent of casesthat involved cash benefits accounted for 94 percentof benefits (for cash and medical care combined).

Cash benefits differ according to the duration andseverity of the worker’s disability. Temporary total dis-ability benefits are paid when the worker is tem-porarily precluded from performing the pre-injuryjob or another job at the employer that the workercould have performed prior to the injury. Most statespay weekly benefits for temporary total disability

that replace two-thirds of the worker’s pre-injurywage, subject to a dollar maximum that varies fromstate to state. In most cases, workers fully recover,return to work, and benefits end. In some cases, theyreturn to work before they reach maximum medicalimprovement and have reduced responsibilities and alower salary. In those cases, they receive temporarypartial disability benefits. Temporary disability bene-fits are the most common type of cash benefits. Theyaccount for 65 percent of cases involving cash bene-fits and 21 percent of benefits incurred (Figures 3).

If a worker has very significant impairments that arejudged to be permanent after he or she reaches maxi-mum medical improvement, permanent total disabili-ty benefits might be paid. These cases are relativelyrare. Permanent total disabilities, together with fatalities, account for 1 percent of all cases thatinvolve cash benefits, and 12 percent of total benefitspending.

Permanent partial disability benefits are paid whenthe worker has impairments that, although perma-nent, do not completely limit the workers’ ability towork. States differ in their methods for determiningwhether a worker is entitled to permanent partial


Figure 3

Types of Disabilities in Workers’ Compensation Cases with Cash Benefits, 2001

Medical only cases are excluded. The data include only privately insured employers in thirty-eight states. Benefits areincurred losses.

Source: NCCI 2004b, Exhibits X and XII.

1% Permanent Total and Fatalities

65% Temporary

34% Permanent

Partial

12% Permanent Total and Fatalities

21% Temporary

67% Permanent Partial

Percent of

Cases

Percent of

Benefits

benefits, the degree of partial disability and theamount of benefits to be paid (Barth and Niss,1999; Burton, 2005). Cash benefits for permanentpartial disability are frequently limited to a specifiedduration or an aggregate dollar limit. Permanent par-tial disabilities account for 34 percent of cases thatinvolve any cash payments and for 67 percent ofspending.

A recent in-depth study examined the likelihood thatworkers’ compensation claimants would receive per-manent partial disability benefits. It focused on indi-viduals in six states who had experienced more thanseven days of lost work time. Those who subsequent-ly received permanent partial benefits ranged fromabout 3 in 10 in one state, to more than half of caseswith at least one week of lost work time in two otherstates (Barth et al., 2002).

Methods for compensating permanent impairmentsfall into several broad categories (Barth, 2004). About43 jurisdictions use a schedule—a list of body partsthat are covered. Typically, a schedule appears in theunderlying statute and lists benefits to be paid forspecific losses, for example, the loss of a finger. Theselosses invariably include the upper and lower extremi-ties and may also include an eye. Most state schedulesalso include the loss of hearing in one or both ears.Injuries to the spine that are permanently disablingare typically not scheduled, nor are injuries to inter-nal organs, head injuries, and occupational diseases.

For unscheduled conditions, the approaches usedcan be categorized into four methods:

■ An impairment-based approach, used in 19states, is most common. In approximately 14of those states, the worker with an unscheduledpermanent partial disability receives a benefitbased entirely on the degree of impairment.Any future earnings losses of the worker are notconsidered.

■ A loss-of-earning-capacity approach is used in 13states. This approach links the benefit to theworker’s ability to earn or to compete in thelabor market and involves a forecast of the eco-nomic impact that the impairment will have onthe worker’s future earnings.

■ In a wage-loss approach, used in 10 states, bene-fits are paid for the actual or ongoing losses

that a worker incurs. In some states, the perma-nent partial disability benefit begins after maxi-mum medical improvement has been achieved.In some cases permanent disability benefits cansimply be the extension of temporary disabilitybenefits until the disabled worker returns toemployment.

■ In a bifurcated approach used in nine jurisdic-tions, the benefit for a permanent disabilitydepends on the worker’s employment status atthe time that the worker’s condition is assessed,after the condition has stabilized. If the workerhas returned to employment with earnings ator near the pre-injury level, the benefit is basedon the degree of impairment. If the worker hasnot returned to employment, or has returnedbut at lower wages than before the injury, thebenefit is based on the degree of lost earningcapacity.

Covered EmploymentIn 2004, workers’ compensation covered an estimat-ed 125.9 million workers, an increase of 0.9 percentfrom the 124.7 million workers covered in 2003(Table 2). Total wages of covered workers were $5.0trillion in 2004, an increase of 5.0 percent from2003. The increases in covered workers and wages in2004 reflect the recovery process from the recessionthat began in March 2001. Covered employment in2004 remained below the peak reached in 2000, andthe increase in covered wages in 2004 was smallerthan in most years in the 1990s. These developmentsreflect the condition of the overall economy.Workers’ compensation coverage rules did notchange significantly during the last decade.

Coverage Rules

Every state except Texas mandates coverage underworkers’ compensation for almost all private employ-ees (U.S. DOL, 2004). In Texas, coverage is volun-tary, but employers not offering coverage are notprotected from tort suits. An employee not coveredby workers’ compensation insurance is allowed to filesuit claiming the employer is liable for his or herwork-related injury or illness.

Other states exempt from mandatory coverage cer-tain categories of workers, such as those in very smallfirms, certain agricultural workers, household work-


ers, employees of charitable or religious organiza-tions, or employees of some units of state and localgovernment. Employers with fewer than three work-ers are exempt from mandatory workers’ compensa-tion coverage in Arkansas, Colorado, Georgia,Michigan, New Mexico, North Carolina, Virginia,and Wisconsin. Employers with fewer than fourworkers are exempt in Florida and South Carolina.Those with fewer than five employees are exempt inAlabama, Mississippi, Missouri, and Tennessee.

The rules for agricultural workers vary among states.In sixteen states (in addition to Texas), farm employ-ers are exempt from mandatory workers’ compensa-tion coverage altogether. In other states, coverage iscompulsory for some or all farm employers.

Method for Estimating Coverage

Because no national system exists for counting work-ers covered by workers’ compensation, the numberof covered workers and their covered wages must be

estimated. The Academy’s methods for estimatingcoverage are described in Appendix A. In brief, westart with the number of workers and total wages ineach state that are covered by unemployment insur-ance (UI). About 96 or 97 percent of all U.S. wageand salary workers are covered by UI (NASI, 2002).We subtract from UI coverage the estimates of theworkers and wages that are not required to be cov-ered by workers’ compensation because of exemp-tions for small firms and farm employers andbecause coverage for employers in Texas is voluntary.

Using these methods we estimate that in 2004, 97.4percent of all UI–covered workers and wages werecovered by workers’ compensation. They account forabout 96 percent of all wage and salary workers inthe United States, self-employed persons are not cov-ered by Unemployment Insurance or by workers’compensation.


Table 2

Number of Workers Covered under Workers' Compensation Programs and Total Covered Wages,1989–2004

Total Workers Total Wages Year (in thousands) Percent Change (in billions) Percent Change

1989 103,900 $ 2,3471990 105,500 1.5 2,442 4.01991 103,700 -1.7 2,553 4.51992 104,588 0.9 2,711 6.21993 106,503 1.8 2,810 3.71994 109,582 2.9 2,955 5.21995 112,377 2.6 3,132 6.01996 114,773 2.1 3,328 6.21997 118,145 2.9 3,591 7.91998 121,485 2.8 3,885 8.21999 124,349 2.4 4,151 6.82000 127,141 2.2 4,495 8.32001 126,972 -0.1 4,604 2.42002 125,603 -1.1 4,615 0.22003 124,685 -0.7 4,717 2.22004 125,863 0.9 4,953 5.0

Source: National Academy of Social Insurance estimates. See Appendix A.


Tab

le 3

Num

ber

of W

orke

rs C

over

ed b

y W

orke

rs’ C

ompe

nsat

ion

and

Tota

l Cov

ered

Wag

es, B

y St

ate,

200

0- 2

004

Cov

ered

Wor

kers

(in

tho

usan

ds)

Cov

ered

Wag

es (

in m

illio

ns)

2003

-200

4 20

03-2

004

2000

2001

2002

2003

2004

% C

hang

e20

0020

0120

0220

0320

04%

Cha

nge

Ala

bam

a1,

747

1,72

61,

704

1,69

81,

720

1.3

$49,

852

$51,

057

$52,

037

$53,

617

$56,

310

5.0

Ala

ska

259

266

270

275

279

1.6

8,85

69,

391

9,78

610

,098

10,5

824.

8

Ari

zona

2,17

22,

195

2,19

12,

222

2,30

43.

770

,313

72,7

4773

,890

77,1

1883

,541

8.3

Ark

ansa

s1,

074

1,07

11,

064

1,06

11,

073

1.2

27,9

5228

,874

29,5

1530

,246

32,0

145.

8

Cal

iforn

ia14

,591

14,7

2814

,588

14,5

5314

,706

1.0

599,

367

606,

472

601,

288

616,

879

653,

145

5.9

Col

orad

o2,

132

2,14

82,

101

2,06

42,

074

0.5

78,6

9280

,930

79,0

9379

,589

82,6

433.

8

Con

nect

icut

1,65

11,

644

1,62

71,

605

1,61

10.

475

,132

77,2

5476

,191

77,5

1982

,095

5.9

Del

awar

e40

040

039

639

640

62.

614

,612

15,3

3115

,654

16,1

6617

,209

6.4

Dist

rict o

f Col

umbi

a45

445

245

845

946

71.

822

,539

23,7

8824

,634

25,5

6027

,418

7.3

Flor

ida

6,66

46,

754

6,76

56,

840

7,03

92.

920

1,92

321

1,24

421

7,17

822

7,17

224

5,13

37.

9

Geo

rgia

3,69

13,

682

3,62

43,

597

3,66

31.

912

5,32

912

8,31

312

8,12

113

0,12

913

7,08

85.

3

Haw

aii

523

527

528

538

554

2.9

15,5

4515

,994

16,6

9417

,564

18,8

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Changes in State Coverage

Because workers’ compensation coverage rules didnot change between 2003 and 2004, differences ingrowth rates among states generally reflect changes inthe states’ overall employment and wages. In Texas,where workers’ compensation is voluntary foremployers, coverage declined from 84 percent ofworkers in 2001 to 76 percent in 2004 according tosurveys in Texas. Estimates for 2003-2004 in Table 3phase in this decline in Texas coverage (Appendix A).In other states, only Massachusetts and Michiganexperienced a decline in the number of coveredworkers due to decline in overall employment, otherjurisdictions experienced an increase in covered jobs

in 2004. With regard to wages covered under work-ers’ compensation, all jurisdictions registered increas-es in 2004 over 2003 (Table 3).

Benefit PaymentsWorkers’ compensation payments for medical treat-ment and cash benefits combined were $56.0 billionin 2004, an increase of 2.3 percent from $54.7 bil-lion in 2003 (Table 4). These are benefits paid to allworkers in a given year, regardless of the year theirinjuries occurred or their illnesses began. This mea-sure is known as calendar year paid benefits. That is,in 2004 $56.0 billion in benefits were paid for allworkers’ compensation cases, whether workers were


Table 4

Workers’ Compensation Benefits, by Type of Insurer, 1987–2004 (in millions)

Percent Change Private State Self- PercentYeara Total in Total Carriers Funds Insured Federalb Medical Medical

1987 27,317 11.0 $15,453 $4,084 $5,082 $2,698 $9,912 36.31988 30,703 12.4 17,512 4,687 5,744 2,760 11,507 37.51989 34,316 11.8 19,918 5,205 6,433 2,760 13,424 39.11990 38,237 11.4 22,222 5,873 7,249 2,893 15,187 39.71991 42,170 10.3 24,515 6,713 7,944 2,998 16,832 39.91992 45,668 8.3 25,280 7,506 9,724 3,158 18,664 40.91993 45,330 -.7 24,129 7,400 10,623 3,178 18,503 40.81994 44,586 -1.6 22,306 7,587 11,527 3,166 17,194 38.61995 43,373 -2.7 21,145 7,893 11,232 3,103 16,733 38.61996 41,837 -3.5 20,392 7,603 10,775 3,066 16,567 39.61997 42,314 1.1 21,645 7,266 10,623 2,780 17,306 40.91998 43,278 2.3 22,966 7,241 10,203 2,868 18,121 41.91999 45,581 5.3 25,726 6,883 10,109 2,862 19,059 41.82000 47,695 4.6 26,866 7,422 10,449 2,957 20,927 43.92001 50,533 6.0 27,970 7,991 11,503 3,069 22,844 45.22002 53,309 5.5 28,783 9,327 12,046 3,154 24,480 45.92003 54,715 2.6 28,547 10,457 12,525 3,185 25,510 46.62004 55,968 2.3 28,346 11,044 13,321 3,256 26,099 46.6

(a) Estimated benefits paid under deductible provisions are included beginning in 1992.

(b) In all years, federal benefits includes those paid under the Federal Employees’ Compensation Act for civilian employeesand the portion of the Black Lung benefit program that is financed by employers and are paid through the federal BlackLung Disability Trust fund. In years before 1997, federal benefits also include the other part of the Black Lung programthat is financed solely by federal funds. In 1997–2003, federal benefits also include a portion of employer-financed bene-fits under the Longshore and Harbor Workers Compensation Act that are not reflected in state data—namely, benefitspaid by self-insured employers and by special funds under the LHWCA. See Appendix H for more information aboutfederal programs.

Source: National Academy of Social Insurance estimates. See Appendices B and H.

injured in 2004 or in a previous year, from 2003 to2004 share of total payments that were for medicalcare remained constant at 46.6 percent.

Method for Estimating Benefits

Our estimates of workers’ compensation benefitspaid are based on three main sources: responses tothe Academy’s questionnaire from state agencies,data from National Association of InsuranceCommissioners (NAIC), and data purchased fromA.M. Best, a private company that specializes in collecting insurance data and rating insurance companies.

The A.M. Best data used for this report show benefitspaid in each state for 2000 through 2004. Theyinclude information for all private carriers in everystate and for nineteen of the twenty-six state funds,but do not include any information about self-insuredemployers or about benefits paid under deductiblearrangements. Under deductible policies written byprivate carriers or state funds, the insurer pays all ofthe workers’ compensation benefits, but employers areresponsible for reimbursing the insurer for those bene-fits up to a specified deductible amount. Deductiblesmay be written into an insurance policy on a per-injury basis, or an aggregate basis, or a combinationof a per-injury basis with an aggregate cap. States varyin the maximum deductibles they allow. In return foraccepting a policy with a deductible, the employerpays a lower premium.

Appendix C summarizes the kinds of data each statereported. States had the most difficulty reportingamounts of benefits paid under deductible arrange-ments. The Academy’s methods for estimating thesebenefits are described in Appendix G. If states wereunable to report benefits paid by self-insuredemployers, these amounts had to be estimated; themethods for estimating self-insured benefits aredescribed in Appendix E. A detailed, state-by-stateexplanation of how the estimates in this report areproduced is in Sources and Methods: A Companion toWorkers’ Compensation: Benefits, Coverage, and Costs,2004 on the Academy’s website at www.nasi.org.

Sources of Insurance Coverage

Private insurance carriers remain the largest source ofworkers’ compensation benefits. In 2004, theyaccounted for 50.6 percent of benefits paid, a declinefrom 52.2 percent of total benefits in 2003 (Table

5). Private carriers are allowed to sell workers’ com-pensation insurance in all but five states that haveexclusive state funds—Ohio, North Dakota,Washington, West Virginia, and Wyoming.

When benefits paid under deductible arrangementsare excluded, privately insured benefits account for36.9 percent of total benefits paid. This is the lowestshare for privately insured benefits in this time series.For the first time privately insured benefits paid are asmaller share of total benefits than are benefits paiddirectly by employers (38.4 percent) through self-insurance (23.8 percent) and employer paiddeductibles (14.6 percent) combined (Table 5).Employers are allowed to self-insure for workers’compensation in all states except North Dakota andWyoming, which require all employers to obtaininsurance from the state fund. In other states,employers can self-insure their risk for workers’ com-pensation benefits if they prove they have the finan-cial capacity to do so. Many large employers chooseto self-insure. Some states permit groups of employ-ers in the same industry to self-insure through groupself-insurance. Benefits provided under group self-insurance are included with the self-insured benefitsin this report.

The share of benefits provided by state funds rose to19.7 percent in 2004, from 19.1 percent in 2003. Atotal of twenty-six states have state funds that pro-vide workers’ compensation insurance. They includethe five exclusive state fund states and twenty-oneothers. In general, state funds are established by anact of the state legislature, have at least part of theirboard appointed by the governor, are usually exemptfrom federal taxes, and typically serve as the insurerof last resort—that is, they do not deny insurancecoverage to employers who have difficulty purchas-ing it privately. Not all state funds meet all these cri-teria, however. In some cases, it is not altogetherclear whether an entity is a state fund or a privateinsurer, or whether it is a state fund or a state entitythat is self-insuring workers’ compensation benefitsfor its own employees. Consequently, the Academy’sexpert panel decided to classify as state funds alltwenty-six entities that are members of the AASCIF(American Association of State CompensationInsurance Funds) (AASCIF, 2006). This includes theSouth Carolina fund, which is the required insurerfor state employees and is available to cities andcounties to insure their employees, but does notinsure private employers.


Federal programs accounted for 5.8 percent of bene-fits paid in 2004. These benefits include paymentsunder the Federal Employee’ Compensation Act forcivilian employees and the portion of the Black Lungbenefit program that is financed by employers andpaid through the federal Black Lung Disability TrustFund. Finally, the federal benefits include benefitsunder the Longshore and Harbor Workers’Compensation Act that are paid by self-insuredemployers and by special funds under that Act. Moredetail about federal programs is in Appendix H.

Trends in Deductibles and Self-Insurance

Prior to the 1990s, deductible policies were not com-mon, but their popularity grew in the mid-1990s. In1992, benefits under deductible policies totaled $1.3billion, or about 2.7 percent of total benefits (Table

6). By 2000, they had risen to $6.2 billion, or 13.0percent of total benefits. In 2004 deductibles totaled$8.2 billion, which was 14.6 percent of total benefitspaid.

In Tables 4 and 5, benefits reimbursed by employersunder deductible policies are included with privatecarrier or state fund benefits, depending on the typeof insurer. Table 6 shows separately the estimateddollar amount of benefits that employers paid underdeductible provisions with each type of insurance.

Employers who have policies with deductibles are, ineffect, self-insuring up to the amount of thedeductible. That is, they are bearing that portion ofthe financial risk. Adding deductibles to self-insuredbenefit payments shows the share of the total marketwhere employers are assuming financial risk. This


Table 5

Total Amount and Percentage Distribution of Workers’ Compensation Benefit Paymentsby Type of Insurer, 1990–2004

Percentage DistributionTotal Self-

Benefits Private Carriers State Funds Self- Insured plusYear (in millions) Total All Deductiblesa All Deductiblesa Federalb Insured Deductibles1990 38,237 100.0 58.1 n/a 15.4 n/a 7.6 19.0 19.01991 42,170 100.0 58.1 n/a 15.9 n/a 7.1 18.8 18.81992 45,668 100.0 55.4 2.7 16.4 * 6.9 21.3 24.01993 45,330 100.0 53.2 4.4 16.3 * 7.0 23.4 27.91994 44,586 100.0 50.0 5.9 17.0 0.4 7.1 25.9 32.21995 43,373 100.0 48.8 7.1 18.2 0.7 7.2 25.9 33.71996 41,837 100.0 48.7 8.3 18.2 0.9 7.3 25.8 35.01997 42,314 100.0 51.2 8.6 17.2 0.7 6.6 25.1 34.41998 43,278 100.0 53.1 9.0 16.7 0.6 6.6 23.6 33.11999 45,581 100.0 56.4 10.2 15.1 0.7 6.3 22.2 33.12000 47,695 100.0 56.3 12.4 15.6 0.6 6.2 21.9 34.92001 50,533 100.0 55.3 12.1 15.8 0.6 6.1 22.8 35.42002 53,309 100.0 54.0 13.0 17.5 0.7 5.9 22.6 36.32003 54,715 100.0 52.2 14.0 19.1 0.8 5.8 22.9 37.72004 55,968 100.0 50.6 13.7 19.7 0.9 5.8 23.8 38.4

* Negligiblen/aNot available

(a) The percentage of total benefits paid by employers under deductible provisions with this type of insurance. (b) Reflects federal benefits included in Table 4.

Source: National Academy of Social Insurance estimates based on Tables 4 and 6.

share of total benefit payments rose from 19.0 per-cent in 1990 to 35.0 percent in 1996, and thenremained between 33 and 36 percent of total bene-fits through 2001. In 2004, this share increased to38.4 from the 2003 share of 37.7 percent of benefitpayments (Table 5).

The growth in self-insurance and in deductible poli-cies in the early 1990s, as well as the down-turn inself-insurance later in the 1990s, probably reflectsdynamics of the insurance market that altered therelative cost to employers of purchasing privateinsurance vis-à-vis self insuring.

In the late 1980s and early 1990s, when workers’compensation benefits and costs rose rapidly, manystates had administrative pricing systems that set thepremium levels that insurance companies couldcharge, and often states limited the rate of increase inpremiums. As a result, premiums did not rise as fastas costs. Growing numbers of employers were not

able to buy insurance in the voluntary marketbecause insurers did not want to sell insurance atpremiums that were less than their expected costs.

Because states require that employers have insurance,they provide ways for high-cost employers to buy it.In some states, the state fund insures all applicants.Some states use a residual market for high-riskemployers and then require that insurers underwritea share of the residual market as a condition fordoing business in the state. During the late 1980sand early 1990s, some states set premiums in theresidual market that did not recognize the highercost associated with residual market employers. Tocover the gap between premiums charged to employ-ers in the residual market and their actual losses,residual market pools assessed fees on insurancecompanies based on the insurer’s share of aggregatepremiums written in the voluntary market in thestate. (Similar fees generally were not assessed onself-insured employers in the state. Also lowering


Table 6

Estimated Employer-Paid Benefits under Deductible Provisions for Workers’ Compensation, (in millions), 1992–2004

Deductibles as a % ofYear Total Private Carriers State Funds Total Benefits

1992 $1,250 $1,250 * 2.71993 2,027 2,008 $ 19 4.51994 2,834 2,645 189 6.41995 3,384 3,060 324 7.81996 3,859 3,492 367 9.21997 3,928 3,650 278 9.31998 4,114 3,873 241 9.51999 4,961 4,661 300 10.92000 6,201 5,931 270 13.02001 6,411 6,130 281 12.72002 7,326 6,935 391 13.72003 8,088 7,639 450 14.82004 8,157 7,659 497 14.6

* Negligible

Note: Data on deductible benefits were available from five states. Five states do not allow policies with deductibles. For thirteen states data were computed by subtracting various components from total benefit figures provided. For the othertwenty-seven states and the District of Columbia, deductible benefits were computed using a ratio of the manual equivalentpremiums.

premiums through the use of high deductibles couldreduce assessments.) As costs rose during the late1980s, more employers ended up in the residualmarket, residual market losses grew, and rising feesassessed on insurers drove up the price of premiumscharged to employers who were not in the residualmarket.

The combination of rising costs and the structure ofadministered prices in the private insurance marketencouraged employers to set up self-insured plans,which did not share in assessments to cover the costof the residual market. Similarly, insurers andemployers turned to hybrid plans that combine largedeductibles with private insurance as a way to lowertheir aggregate premiums, and consequently, theirshare of assessments for the operating losses in theresidual market.

Declining workers’ compensation benefits and costsin the mid-1990s combined with a vibrant economyand high financial market returns enabled insurancecompanies to earn more from invested premiums.The combination of improved underwriting resultsand higher returns on reserves led to high profits byhistorical standards within the workers’ compensa-tion insurance industry (Yates and Burton, 2005).These relatively high profits led to fierce underwrit-ing competition. Insurance companies began offer-ing multi-year guaranteed cost programs that lockedin low premium rates for employers, thus greatlyreducing the employers’ cost and risk. Tax advantagesinherent in the purchase of insurance also made itattractive—that is, employers can take an immediatetax deduction for premiums they pay for insurance,while when they self-insure, tax deductions accrueonly later as they pay claims. These factors led to ashift away from self-insurance in favor of the pur-chase of insurance later in the 1990s.

Since 1999, the share of benefits paid directly byemployers (through self-insurance and largedeductibles combined) has been rising. In 2004, theshare of benefits paid by employers reached 38.4 per-cent, the highest recorded in this data series. For thefirst time, the share of benefits paid by employers(through self-insurance or deductibles) exceeded theshare paid by private carriers excluding deductibles,which was 36.9 percent in 2004 (Table 5).

Changes in State Benefits

On a national level, total benefits (cash plus medical)were 2.3 percent higher in 2004 than in 2003.Focusing only on national growth conceals a greatdeal of variation among states. Table 7 shows annualchanges in state benefit payments between 2000 and2004.

In nine states: Benefits declined between 2003 and2004. Alabama, Delaware, Florida, Hawaii,Massachusetts, Nebraska, New Hampshire, Texas,and West Virginia. The rest of the states showed anincrease in benefits.

Benefits vary within a state from year to year formany reasons, including:

■ Changes in workers' compensation statutes,new court rulings, or new administrative procedures;

■ Changes in the mix of occupations or indus-tries, because jobs differ in their rates of injuryand illness;

■ Fluctuations in employment, because morepeople working means more people at risk of ajob-related illness or injury;

■ Changes in wage rates to which benefit levelsare linked;

■ Variations in health care practice patternsacross states, which influence the costs of medical care;

■ Fluctuations in the number and severity ofinjuries and illnesses for other reasons (forexample, in a small state, one industrial acci-dent involving many workers in a particularyear can show up as a noticeable increase instatewide benefit payments); and

■ Changes in reporting procedures (for example,as state agencies update their record keepingsystems, the type of data they are able to reportoften changes, and new legislation can alsoaffect the data a state is able to provide).

Medical Payments in States

The share of benefits for medical care varies amongstates. In 2004 the share of benefit spending formedical care ranged from lows of less than 40 per-cent—in the District of Columbia, Connecticut,


Hawaii, Massachusetts, Michigan, New York, RhodeIsland and Washington—to highs of over 60 percentin Alabama, Arizona, Arkansas, Indiana, SouthDakota, Texas, and Utah (Table 8). Many factors ina state can influence the relative share of benefits formedical care as opposed to cash wage-replacement orsurvivor benefits. Among them are:

■ Different levels of earnings replacement provid-ed by cash benefits, which mean that, all elsebeing equal, states with more generous cashbenefits have a lower share of benefits used formedical care;

■ Differences in medical costs, medical practices,and the role of workers’ compensation pro-grams in regulating allowable medical costs;

■ Differences in waiting periods for cash benefitsand in statutes determining permanent disabili-ty awards; and

■ The industry-mix in each state, which influ-ences the types of illnesses and injuries thatoccur, and thus the level of medical costs.

Some states were not able to report the portion oftheir total benefits that were for medical care. Inthose cases, medical benefits were estimated based oninformation from the National Council onCompensation Insurance and from other states.These states are footnoted in Table 8. Methods forestimating medical benefits are described inAppendix F.

In twenty-two jurisdictions medical benefits rosefaster than cash benefits. In three states, medical andcash benefits increased at the same rates. In fivestates, medical benefits rose but cash benefits fell. Incontrast, in nine states cash benefits to workers grewfaster than medical payments. In six states, cash ben-efits rose but medical benefits actually decreased.Finally, in five states, cash and medical benefitsdecreased, which included Delaware where they fellat the same rates. In Ohio, medical and cash benefitsdid not change from 2003 (Table 9).

State Benefits Relative to Wages

One way to standardize state benefit payments totake account of states’ differing population sizes is todivide each state’s benefits by the number of workerscovered by the state’s workers’ compensation pro-

gram. A second way is to divide total benefits bytotal wages of covered workers. The latter takesaccount of both the number of workers and prevail-ing wage levels in the state. The measure of benefitsas a percent of covered wages helps show whetherlarge growth in benefits payments may be due togrowth in the state’s population of covered workersand covered payroll. Benefits per $100 of coveredpayroll in 2000 through 2004 are shown in Table10. In 2004, employment began to recover from the2001 recession. As new jobs were created, coveredpayroll rose by 5.0 percent between 2003 and 2004(Table 3). In eight jurisdictions covered payroll rosemore than seven percentage points—Arizona,District of Columbia, Florida, Hawaii, Nevada,North Dakota, Virginia and Wyoming. Consequent-ly, when benefits are standardized relative to coveredpayroll, the state patterns of change are somewhatdifferent from those revealed by looking only at dol-lar changes in benefits.

While benefit payments that are standardized relativeto wages in a state provide a useful perspective forlooking at changes within particular states over time,the data do not provide meaningful comparisons ofthe adequacy of benefits across states. Measures ofbenefit adequacy would compare benefits injuredworkers received with their actual wage loss. A statewith relatively high payments as indicated in Table10 may in fact be replacing a relatively low portionof injured workers’ actual earnings losses.

Alternatively, a state with relatively low benefits asindicated in Table 10 may be replacing a relativelyhigh portion of actual earnings losses. By the sametoken, these figures do not show the comparativecost to employers of locating their business in onestate versus another. Some reasons for cautioningagainst using these data to compare the adequacy ofbenefits for workers or the costs to employers acrossstates are set out below.

Caveats on comparing benefit adequacy acrossstates. As discussed in the Academy’s study panelreport titled Adequacy of Earnings Replacement inWorkers’ Compensation Programs (Hunt, 2004), anappropriate study of adequacy compares the benefitsdisabled workers actually receive with the wages theylose because of their injuries or occupational diseases.Such data are not available on a consistent basisacross states. Aggregate benefits relative to aggregate



Tab

le 7

Wor

kers

' Com

pens

atio

n B

enef

its

by S

tate

, 200

0–20

04(i

n th

ousa

nds)

Stat

e20

0020

0120

0220

0320

0420

00-2

001

2001

-200

220

02-2

003

2003

-200

420

00-2

004

Ala

bam

a2$5

29,1

89$5

62,7

73$5

65,2

64$5

80,1

84$5

75,6

976.

30.

42.

6-0

.88.

8A

lask

a213

9,37

816

3,11

118

0,04

618

4,37

919

4,19

517

.010

.42.

45.

339

.3A

rizo

na1,

5,6

497,

955

436,

037

505,

278

531,

240

584,

750

-12.

415

.95.

110

.117

.4A

rkan

sas1

213,

969

217,

719

221,

474

225,

061

225,

689

1.8

1.7

1.6

0.3

5.5

Cal

iforn

ia2,

69,

449,

145

10,0

82,5

8011

,582

,431

12,4

03,7

2912

,459

,638

6.7

14.9

7.1

0.5

31.9

Col

orad

o1,5

,681

0,30

156

6,35

476

0,95

875

7,04

183

4,59

4-3

0.1

34.4

-0.5

10.2

3.0

Con

nect

icut

1,5

638,

435

641,

341

675,

895

674,

747

684,

930

0.5

5.4

-0.2

1.5

7.3

Del

awar

e1,5

,713

7,73

713

8,37

115

2,93

316

0,26

415

8,19

00.

510

.54.

8-1

.314

.8D

istric

t of C

olum

bia1

,5,7

85,9

0991

,148

93,9

6089

,108

98,4

436.

13.

1-5

.210

.514

.6Fl

orid

a1,5

2,57

6,87

53,

033,

955

2,67

8,08

22,

811,

302

2,75

9,71

217

.7-1

1.7

5.0

-1.8

7.1

Geo

rgia

1,5,

796

4,99

51,

029,

374

974,

661

1,06

1,96

91,

127,

654

6.7

-5.3

9.0

6.2

16.9

Haw

aii2

,623

1,35

924

8,10

026

7,82

727

4,92

227

1,29

07.

28.

02.

6-1

.317

.3Id

aho1

,5,6

,711

3,59

817

9,64

018

5,68

819

6,39

421

0,32

658

.13.

45.

87.

185

.1Ill

inoi

s1,4

,51,

948,

330

2,07

9,76

82,

123,

878

2,10

3,65

82,

213,

372

6.7

2.1

-1.0

5.2

13.6

Indi

ana1

,4,5

528,

901

524,

111

547,

305

559,

421

608,

717

-0.9

4.4

2.2

8.8

15.1

Iow

a1,4

,534

2,93

039

0,23

540

0,22

642

4,19

844

5,83

213

.82.

66.

05.

130

.0K

ansa

s1,5

322,

707

340,

483

341,

606

293,

473

365,

546

5.5

0.3

-14.

124

.613

.3K

entu

cky1

,4,5

,657

5,29

267

1,87

570

8,42

472

4,29

176

3,05

016

.85.

42.

25.

432

.6Lo

uisia

na1,

5,6

546,

544

587,

855

562,

812

585,

480

589,

209

7.6

-4.3

4.0

0.6

7.8

Mai

ne1

244,

714

245,

145

261,

734

239,

777

269,

917

0.2

6.8

-8.4

12.6

10.3

Mar

ylan

d1,5

,664

1,04

468

1,63

366

4,28

270

1,29

776

7,57

66.

3-2

.55.

69.

519

.7M

assa

chus

etts

1,5

800,

837

881,

417

902,

840

1,05

7,17

51,

045,

747

10.1

2.4

17.1

-1.1

30.6

Mic

higa

n21,

474,

058

1,47

7,98

61,

512,

457

1,47

6,85

01,

517,

386

0.3

2.3

-2.4

2.7

2.9

Min

neso

ta3

797,

787

904,

451

921,

518

885,

006

933,

975

13.4

1.9

-4.0

5.5

17.1

Miss

issip

pi1,

529

2,67

728

4,72

929

0,37

829

1,01

430

5,51

6-2

.72.

00.

25.

04.

4M

issou

ri2

779,

786

958,

708

1,11

5,83

21,

080,

870

1,11

9,87

122

.916

.4-3

.13.

643

.6M

onta

na2

154,

797

179,

613

177,

877

200,

857

211,

059

16.0

-1.0

12.9

5.1

36.3

Neb

rask

a1,4

,522

9,64

424

7,61

628

2,84

429

0,41

928

3,14

87.

814

.22.

7-2

.523

.3N

evad

a232

3,56

730

9,32

132

4,59

732

6,55

635

7,93

7-4

.44.

90.

69.

610

.6N

ew H

amps

hire

1,4,

517

8,52

221

5,15

821

1,73

421

9,62

921

3,96

420

.5-1

.63.

7-2

.619

.9N

ew J

erse

y1,7

1,18

2,64

41,

255,

974

1,32

8,65

01,

379,

235

1,39

8,35

86.

25.

83.

81.

418

.2


New

Mex

ico2

143,

592

159,

050

175,

845

189,

427

196,

123

10.8

10.6

7.7

3.5

36.6

New

Yor

k22,

909,

115

2,97

8,22

43,

142,

392

3,22

0,39

83,

337,

490

2.4

5.5

2.5

3.6

14.7

Nor

th C

arol

ina1

,4,5

872,

669

905,

253

987,

731

1,06

6,61

11,

159,

117

3.7

9.1

8.0

8.7

32.8

Nor

th D

akot

a3,9

69,9

6671

,267

73,5

1578

,453

83,2

371.

93.

26.

76.

119

.0O

hio8

2,09

8,54

52,

248,

369

2,38

8,18

62,

442,

187

2,44

2,13

77.

16.

22.

30.

016

.4O

klah

oma1

,5,6

485,

371

526,

070

508,

931

553,

922

572,

001

8.4

-3.3

8.8

3.3

17.8

Ore

gon3

425,

460

472,

691

474,

547

471,

307

506,

813

11.1

0.4

-0.7

7.5

19.1

Penn

sylv

ania

32,

378,

828

2,40

6,27

22,

478,

709

2,56

5,34

42,

594,

238

1.2

3.0

3.5

1.1

9.1

Rho

de I

sland

1,5,

6,7

126,

721

135,

703

141,

066

130,

865

142,

268

7.1

4.0

-7.2

8.7

12.3

Sout

h C

arol

ina3

515,

381

532,

374

592,

530

656,

935

688,

115

3.3

11.3

10.9

4.7

33.5

Sout

h D

akot

a263

,165

70,6

6073

,382

73,7

6776

,472

11.9

3.9

0.5

3.7

21.1

Tenn

esse

e1,4

,578

0,53

484

3,06

277

7,26

484

2,64

789

5,80

88.

0-7

.88.

46.

314

.8Te

xas1

,5,6

,72,

160,

372

2,21

2,27

52,

307,

054

1,85

6,94

21,

574,

451

2.4

4.3

-19.

5-1

5.2

-27.

1U

tah1

,4,5

,617

2,87

019

7,60

621

1,88

318

6,34

421

8,26

414

.37.

2-1

2.1

17.1

26.3

Ver

mon

t1,4

,510

1,98

597

,654

119,

329

119,

961

128,

076

-4.2

22.2

0.5

6.8

25.6

Vir

gini

a2,4

602,

035

604,

383

626,

954

701,

593

762,

067

0.4

3.7

11.9

8.6

26.6

Was

hing

ton8

1,52

6,51

41,

638,

997

1,71

6,10

71,

800,

076

1,83

6,09

77.

44.

74.

92.

020

.3W

est V

irgi

nia6

,7,8

693,

057

713,

130

832,

608

828,

913

741,

034

2.9

16.8

-0.4

-10.

66.

9W

iscon

sin4,

5,8

768,

282

923,

761

896,

556

840,

354

1,04

2,72

520

.2-2

.9-6

.324

.135

.7W

yom

ing6

,8,9

89,0

4110

0,07

610

7,47

511

4,25

212

0,06

212

.47.

46.

35.

134

.8N

on-f

eder

al t

otal

44,7

37,1

3047

,463

,457

50,1

55,5

5751

,529

,845

52,7

11,8

826.

15.

72.

72.

317

.8Fe

dera

la2,

957,

404

3,06

9,26

73,

153,

626

3,18

4,68

53,

256,

239

3.8

2.7

1.0

2.2

10.1

Fede

ral e

mpl

oyee

s2,

118,

859

2,22

3,08

82,

317,

325

2,36

7,75

72,

445,

077

4.9

4.2

2.2

3.3

15.4

TO

TA

L47

,694

,534

50,5

32,7

2453

,309

,183

54,7

14,5

3055

,968

,121

6.0

5.5

2.6

2.3

17.3

(a)

Incl

udes

fede

ral b

enef

its a

s in

clud

ed in

Tab

le 8

.

1)D

educ

tible

dat

a w

ere

not

avai

labl

e. D

educ

tible

s w

ere

estim

ated

usin

g th

e a

ratio

bas

ed o

n M

anua

l Equ

ival

ent

prem

ium

s.2)

Ded

uctib

le d

ata

wer

e es

timat

ed b

y su

btra

ctin

g th

e A

M B

est

data

from

Age

ncy

data

.3)

Ded

uctib

le d

ata

was

giv

en b

y th

e A

genc

y.4)

Self-

insu

ranc

e da

ta w

ere

not

avai

labl

e an

d w

ere

impu

ted.

Met

hod

is ou

tline

d in

App

endi

x E

.5)

AM

Bes

t da

ta a

re u

sed

for

priv

ate

carr

ier

bene

fit e

stim

ates

for

all t

he fi

ve y

ears

.6)

A.M

. Bes

t or

NA

IC d

ata

used

for

the

Stat

e fu

nd d

ata.

7)T

he S

elf-

insu

ranc

e da

ta fo

r 20

04 w

as im

pute

d us

ing

2003

’s av

aila

ble

data

.8)

Ded

uctib

les

not

allo

wed

.9)

Self-

Insu

ranc

e is

not

allo

wed

.

Sour

ce: N

atio

nal A

cade

my

of S

ocia

l Ins

uran

ce e

stim

ates

bas

ed o

n da

ta fr

om s

tate

age

ncie

s, A

.M. B

est,

Nat

iona

l Ass

ocia

tion

of I

nsur

ance

Com

miss

ione

rs (

NA

IC),

the

U.S

. Dep

artm

ent

ofLa

bor

and

the

Soci

al S

ecur

ity A

dmin

istra

tion.


Tab

le 8

Wor

kers

’ Com

pens

atio

n B

enef

its

by T

ype

of I

nsur

er a

nd M

edic

al B

enef

its,

by

Stat

e, 2

004

(in

thou

sand

s)

Stat

eTo

tal

Priv

ate

Car

rier

sSt

ate

Fund

s Se

lf-In

sure

dbM

edic

alPe

rcen

t M

edic

al

Ala

bam

a$

575,

697

$ 27

7,58

5$

298,

112

$ 35

7,73

962

.1c

Ala

ska

194,

195

142,

286

51,9

1010

8,34

855

.8c

Ari

zona

584,

750

185,

882

295,

598

103,

270

375,

591

64.2

c

Ark

ansa

s22

5,68

916

0,64

265

,047

136,

946

60.7

c

Cal

iforn

ia12

,459

,638

5,56

2,02

03,

202,

628

3,69

4,99

06,

072,

398

48.7

Col

orad

o83

4,59

427

1,25

341

6,61

814

6,72

340

6,93

048

.8c

Con

nect

icut

684,

930

433,

077

251,

853

271,

039

39.6

c

Del

awar

e15

8,19

011

3,94

844

,242

75,7

1147

.9d

Dis

tric

t of

Col

umbi

a98

,443

75,4

1523

,029

38,0

8938

.7c

Flor

ida

2,75

9,71

22,

219,

913

539,

799

1,63

7,27

059

.3c

Geo

rgia

1,12

7,65

476

8,47

835

9,17

653

8,76

447

.8c

Haw

aii

271,

290

150,

840

34,0

1586

,436

103,

900

38.3

c

Idah

o21

0,32

674

,896

122,

429

13,0

0112

4,27

759

.1c

Illin

ois

2,21

3,37

21,

646,

713

566,

659

1,07

3,61

448

.5c

Indi

ana

608,

717

489,

351

119,

366

413,

979

68.0

c

Iow

a44

5,83

233

7,82

410

8,00

823

0,11

751

.6c

Kan

sas

365,

546

241,

025

124,

522

200,

913

55.0

c

Ken

tuck

y76

3,05

042

2,50

672

,097

268,

447

411,

837

54.0

c

Loui

sian

a58

9,20

929

7,49

316

3,73

312

7,98

429

7,06

550

.4c

Mai

ne26

9,91

794

,800

84,2

6990

,847

113,

359

42.0

c

Mar

ylan

d76

7,57

644

8,75

619

6,09

712

2,72

331

7,62

141

.4c

Mas

sach

uset

ts1,

045,

747

900,

741

145,

006

358,

708

34.3

Mic

higa

n1,

517,

386

827,

277

690,

109

569,

855

37.6

Min

neso

ta93

3,97

557

6,23

212

0,48

823

7,25

545

5,24

848

.7M

issis

sippi

305,

516

172,

433

133,

083

170,

668

55.9

c

Miss

ouri

1,11

9,87

168

4,95

011

4,56

032

0,36

156

4,84

150

.4c

Mon

tana

211,

059

67,7

5710

3,55

939

,743

113,

201

53.6

c

Neb

rask

a28

3,14

821

8,11

365

,035

166,

863

58.9

c


Nev

ada

357,

937

239,

619

118,

317

175,

796

49.1

c

New

Ham

pshi

re21

3,96

416

7,86

846

,096

119,

685

55.9

c

New

Jer

sey

1,39

8,35

81,

278,

746

119,

612

669,

265

47.9

dN

ew M

exic

o19

6,12

387

,748

32,1

7076

,205

115,

830

59.1

c

New

Yor

k3,

337,

490

1,73

2,84

177

5,14

682

9,50

31,

127,

178

33.8

Nor

th C

arol

ina

1,15

9,11

784

4,19

931

4,91

951

2,14

644

.2c

Nor

th D

akot

aa83

,237

260

82,9

7746

,870

56.3

Ohi

oa2,

442,

137

37,5

091,

935,

728

468,

900

1,14

1,08

246

.7O

klah

oma

572,

001

241,

921

212,

864

117,

216

263,

451

46.1

c

Ore

gon

506,

813

234,

700

228,

642

43,4

7227

0,25

353

.3c

Penn

sylv

ania

2,59

4,23

81,

803,

792

226,

158

564,

288

1,06

8,66

141

.2R

hode

Isla

nd14

2,26

840

,504

85,0

9616

,669

49,9

9035

.1c

Sout

h C

arol

ina

688,

115

461,

543

49,6

2917

6,94

431

8,81

146

.3c

Sout

h D

akot

a76

,472

72,7

493,

723

48,1

2262

.9c

Tenn

esse

e89

5,80

864

9,33

324

6,47

546

2,46

651

.6c

Texa

s1,

574,

451

991,

865

297,

235

285,

350

958,

631

60.9

c

Uta

h21

8,26

456

,281

122,

905

39,0

7714

9,24

068

.4c

Ver

mon

t12

8,07

610

6,19

221

,884

58,6

1145

.8c

Vir

gini

a76

2,06

755

4,39

720

7,67

041

9,95

555

.1c

Was

hing

tona

1,83

6,09

730

,766

1,32

3,41

048

1,92

163

6,21

134

.7W

est V

irgi

niaa

741,

034

7,31

762

9,61

710

4,10

035

4,66

547

.9d

Wis

cons

in1,

042,

725

840,

423

202,

302

499,

057

47.9

d

Wyo

min

ga12

0,06

23,

534

116,

528

57,4

6347

.9d

Non

-fed

eral

tot

al52

,711

,882

28,3

46,3

1011

,044

,194

13,3

21,3

7825

,228

,333

47.9

Fede

rale

3,25

6,23

987

0,87

226

.7Fe

dera

l em

ploy

ees

2,44

5,07

770

1,11

028

.7T

OT

AL

55,9

68,1

2126

,099

,205

46.6

(a)

Stat

es w

ith e

xclu

sive

fund

s (O

hio,

Nor

th D

akot

a, W

ashi

ngto

n, W

est V

irgi

nia,

and

Wyo

min

g) m

ay h

ave

smal

l am

ount

s of

ben

efits

pai

d in

the

pri

vate

car

rier

cat

egor

y. T

his

resu

lts fr

omtw

o so

urce

s: co

mpa

nies

with

gro

up p

olic

ies

that

ove

rlap

stat

es a

nd t

he fa

ct t

hat

som

e co

mpa

nies

incl

ude

exce

ss w

orke

rs’ c

ompe

nsat

ion

cove

rage

in t

heir

rep

orts

of w

orke

rs’ c

ompe

nsa-

tion

bene

fits

to A

.M. B

est.

(b)S

elf-

insu

ranc

e in

clud

es in

divi

dual

sel

f-in

sure

rs a

nd g

roup

sel

f-in

sura

nce.

(c)

Med

ical

per

cent

ages

bas

ed o

n da

ta p

rovi

ded

by N

CC

I, s

ee A

ppen

dix

F.

(d)M

edic

al p

erce

ntag

e ba

sed

on t

he w

eigh

ted

aver

age

of s

tate

s w

here

med

ical

dat

a w

ere

avai

labl

e, s

ee A

ppen

dix

F.(e

)Fe

dera

l ben

efits

incl

ude:

tho

se p

aid

unde

r th

e Fe

dera

l Em

ploy

ees’

Com

pens

atio

n A

ct fo

r ci

vilia

n em

ploy

ees;

the

port

ion

of t

he B

lack

Lun

g be

nefit

pro

gram

tha

t is

fina

nced

by

empl

oy-

ers;

and

a po

rtio

n of

ben

efits

und

er t

he L

ongs

hore

and

Har

bor

Wor

kers

’ Com

pens

atio

n A

ct t

hat

are

not

refle

cted

in s

tate

dat

a, n

amel

y, b

enef

its p

aid

by s

elf-

insu

red

empl

oyer

s an

d by

spec

ial f

unds

und

er t

he L

HW

CA

. See

App

endi

x H

for

mor

e in

form

atio

n ab

out

fede

ral p

rogr

ams.

Sour

ce: N

atio

nal A

cade

my

of S

ocia

l Ins

uran

ce e

stim

ates

bas

ed o

n da

ta r

ecei

ved

from

sta

te a

genc

ies,

the

U.S

. Dep

artm

ent

of L

abor

, A.M

. Bes

t, an

d th

e N

atio

nal C

ounc

il on

Com

pens

atio

n In

sura

nce.


Tab

le 9

Med

ical

, Cas

h an

d To

tal B

enef

its,

by

stat

e, 2

003-

2004

a

(in

thou

sand

s)

2003

2004

2003

-200

4 Pe

rcen

t C

hang

eSt

ate

Med

ical

Cas

hTo

tal

Med

ical

Cas

hTo

tal

Med

ical

Cas

hTo

tal

Ala

bam

a36

4,61

621

5,56

858

0,18

435

7,73

921

7,95

857

5,69

7-1

.91.

1-0

.8A

lask

a10

1,41

782

,962

184,

379

108,

348

85,8

4819

4,19

56.

83.

55.

3A

rizo

na33

7,05

619

4,18

453

1,24

037

5,59

120

9,15

958

4,75

011

.47.

710

.1A

rkan

sas

139,

779

85,2

8222

5,06

113

6,94

688

,742

225,

689

-2.0

4.1

0.3

Cal

iforn

ia6,

329,

029

6,07

4,70

112

,403

,729

6,07

2,39

86,

387,

240

12,4

59,6

38-4

.15.

10.

5C

olor

ado

332,

713

424,

327

757,

041

406,

930

427,

663

834,

594

22.3

0.8

10.2

Con

nect

icut

288,

356

386,

392

674,

747

271,

039

413,

891

684,

930

-6.0

7.1

1.5

Del

awar

e76

,703

83,5

6116

0,26

475

,711

82,4

7915

8,19

0-1

.3-1

.3-1

.3D

istri

ct o

f Col

umbi

a32

,973

56,1

3589

,108

38,0

8960

,354

98,4

4315

.57.

510

.5Fl

orid

a1,

631,

140

1,18

0,16

22,

811,

302

1,63

7,27

01,

122,

442

2,75

9,71

20.

4-4

.9-1

.8G

eorg

ia50

2,97

455

8,99

51,

061,

969

538,

764

588,

890

1,12

7,65

47.

15.

36.

2H

awai

i10

5,50

316

9,42

027

4,92

210

3,90

016

7,39

027

1,29

0-1

.5-1

.2-1

.3Id

aho

112,

159

84,2

3519

6,39

412

4,27

786

,049

210,

326

10.8

2.2

7.1

Illin

ois

975,

428

1,12

8,22

92,

103,

658

1,07

3,61

41,

139,

757

2,21

3,37

210

.11.

05.

2In

dian

a37

8,31

018

1,11

155

9,42

141

3,97

919

4,73

860

8,71

79.

47.

58.

8Io

wa

205,

463

218,

734

424,

198

230,

117

215,

715

445,

832

12.0

-1.4

5.1

Kan

sas

160,

283

133,

190

293,

473

200,

913

164,

633

365,

546

25.3

23.6

24.6

Ken

tuck

y39

2,11

133

2,18

072

4,29

141

1,83

735

1,21

376

3,05

05.

05.

75.

4Lo

uisi

ana

297,

357

288,

122

585,

480

297,

065

292,

144

589,

209

-0.1

1.4

0.6

Mai

ne11

0,79

012

8,98

723

9,77

711

3,35

915

6,55

826

9,91

72.

321

.412

.6M

aryl

and

292,

542

408,

755

701,

297

317,

621

449,

955

767,

576

8.6

10.1

9.5

Mas

sach

uset

ts35

0,93

170

6,24

51,

057,

175

358,

708

687,

039

1,04

5,74

72.

2-2

.7-1

.1M

ichi

gan

542,

574

934,

276

1,47

6,85

056

9,85

594

7,53

11,

517,

386

5.0

1.4

2.7

Min

neso

ta41

3,72

647

1,28

088

5,00

645

5,24

847

8,72

693

3,97

510

.01.

65.

5M

issis

sipp

i16

2,55

312

8,46

129

1,01

417

0,66

813

4,84

830

5,51

65.

05.

05.

0M

isso

uri

534,

615

546,

255

1,08

0,87

056

4,84

155

5,02

91,

119,

871

5.7

1.6

3.6

Mon

tana

105,

286

95,5

7120

0,85

711

3,20

197

,859

211,

059

7.5

2.4

5.1


Neb

rask

a17

1,36

111

9,05

829

0,41

916

6,86

311

6,28

628

3,14

8-2

.6-2

.3-2

.5N

evad

a15

0,15

117

6,40

632

6,55

617

5,79

618

2,14

135

7,93

717

.13.

39.

6N

ew H

amps

hire

123,

981

95,6

4821

9,62

911

9,68

594

,278

213,

964

-3.5

-1.4

-2.6

New

Jer

sey

660,

107

719,

128

1,37

9,23

566

9,26

572

9,09

31,

398,

358

1.4

1.4

1.4

New

Mex

ico

107,

936

81,4

9118

9,42

711

5,83

080

,293

196,

123

7.3

-1.5

3.5

New

Yor

k1,

039,

503

2,18

0,89

43,

220,

398

1,12

7,17

82,

210,

311

3,33

7,49

08.

41.

33.

6N

orth

Car

olin

a48

0,92

558

5,68

61,

066,

611

512,

146

646,

971

1,15

9,11

76.

510

.58.

7N

orth

Dak

ota

43,1

0235

,352

78,4

5346

,870

36,3

6783

,237

8.7

2.9

6.1

Ohi

o1,

140,

541

1,30

1,64

62,

442,

187

1,14

1,08

21,

301,

055

2,44

2,13

70.

00.

00.

0O

klah

oma

262,

953

290,

970

553,

922

263,

451

308,

550

572,

001

0.2

6.0

3.3

Ore

gon

245,

975

225,

332

471,

307

270,

253

236,

559

506,

813

9.9

5.0

7.5

Penn

sylv

ania

1,04

0,16

91,

525,

175

2,56

5,34

41,

068,

661

1,52

5,57

72,

594,

238

2.7

0.0

1.1

Rho

de I

sland

40,5

7990

,286

130,

865

49,9

9092

,278

142,

268

23.2

2.2

8.7

Sout

h C

arol

ina

312,

056

344,

879

656,

935

318,

811

369,

305

688,

115

2.2

7.1

4.7

Sout

h D

akot

a46

,331

27,4

3673

,767

48,1

2228

,350

76,4

723.

93.

33.

7Te

nnes

see

445,

703

396,

944

842,

647

462,

466

433,

342

895,

808

3.8

9.2

6.3

Texa

s1,

169,

889

687,

053

1,85

6,94

295

8,63

161

5,82

01,

574,

451

-18.

1-1

0.4

-15.

2U

tah

121,

849

64,4

9518

6,34

414

9,24

069

,023

218,

264

22.5

7.0

17.1

Ver

mon

t58

,147

61,8

1311

9,96

158

,611

69,4

6512

8,07

60.

812

.46.

8V

irgi

nia

393,

992

307,

601

701,

593

419,

955

342,

112

762,

067

6.6

11.2

8.6

Was

hing

ton

619,

553

1,18

0,52

31,

800,

076

636,

211

1,19

9,88

61,

836,

097

2.7

1.6

2.0

Wes

t Vir

gini

a 24

1,67

658

7,23

782

8,91

335

4,66

538

6,36

974

1,03

446

.8-3

4.2

-10.

6W

iscon

sin40

2,19

643

8,15

884

0,35

449

9,05

754

3,66

81,

042,

725

24.1

24.1

24.1

Wyo

min

g72

,090

42,1

6111

4,25

257

,463

62,5

9912

0,06

2-2

0.3

48.5

5.1

Non

-fed

eral

tot

al24

,667

,151

26,8

62,6

9451

,529

,845

25,2

28,3

3327

,483

,548

52,7

11,8

822.

32.

32.

3

a)In

sta

tes

with

a n

ote,

the

re w

as a

diff

eren

ce in

met

hods

bet

wee

n th

e tw

o ye

ars

bein

g co

mpa

red

for

at le

ast

one

com

pone

nt o

f the

est

imat

es. S

ome

of t

he p

erce

nt c

hang

e in

ben

efits

,th

eref

ore,

mig

ht b

e du

e to

the

diff

erin

g m

etho

ds. T

he n

otes

are

giv

en in

Tab

le 8

. For

mor

e de

tail

on s

tate

by

stat

e m

etho

dolo

gies

, see

, Sou

rces

and

Met

hods

: A C

ompa

nion

to W

orke

rs’C

ompe

nsat

ion:

Ben

efits

, Cov

erag

e, a

nd C

osts,

200

4se

ctio

n of

the

Aca

dem

y’s w

ebsit

e at

ww

w.n

asi.o

rg.

Sour

ce: N

atio

nal A

cade

my

of S

ocia

l Ins

uran

ce e

stim

ates

bas

ed o

n da

ta fr

om s

tate

age

ncie

s an

d A

.M. B

est.


Table 10

State Workers' Compensation Benefits Per $100 of Covered Wages, by State, 2000–2004

Dollar Amount Changea

2000 2001 2002 2003 2004 2003-2004 2000-2004

Alabama 1.06 1.10 1.09 1.08 1.02 -.06 -.04Alaska 1.57 1.74 1.84 1.83 1.84 .01 .26Arizona 0.71 0.60 0.68 0.69 0.70 .01 -.01Arkansas 0.77 0.75 0.75 0.74 0.70 -.04 -.06California 1.58 1.66 1.93 2.01 1.91 -.10 .33Colorado 1.03 0.70 0.96 0.95 1.01 .06 -.02Connecticut 0.85 0.83 0.89 0.87 0.83 -.04 -.02Delaware 0.94 0.90 0.98 0.63 0.92 .29 -.02District of Columbia 0.38 0.38 0.38 0.55 0.36 -.19 -.02Florida 1.28 1.44 1.23 1.24 1.13 -.11 -.15Georgia 0.77 0.80 0.76 0.82 0.82 .01 .05Hawaii 1.49 1.55 1.60 1.57 1.44 -.13 -.05Idaho 0.75 1.17 1.20 1.24 1.24 .00 .48Illinois 0.88 0.92 0.95 0.93 0.94 .01 .06Indiana 0.59 0.59 0.61 0.61 0.63 .02 .04Iowa 0.87 0.97 0.98 1.00 1.00 -.01 .13Kansas 0.87 0.89 0.88 0.75 0.89 .14 .03Kentucky 1.17 1.33 1.38 1.37 1.38 .01 .21Louisiana 1.08 1.11 1.04 1.06 1.02 -.04 -.06Maine 1.56 1.49 1.55 1.37 1.48 .10 -.08Maryland 0.79 0.80 0.76 0.78 0.80 .03 .01Massachusetts 0.56 0.61 0.64 0.74 0.69 -.05 .13Michigan 0.90 0.92 0.94 0.90 0.91 .01 .01Minnesota 0.88 0.96 0.97 0.91 0.90 .00 .03Mississippi 1.12 1.08 1.08 1.05 1.06 .01 -.05Missouri 1.00 1.20 1.38 1.32 1.32 .00 .31Montana 1.79 1.97 1.88 2.02 2.00 -.02 .21Nebraska 0.97 1.02 1.14 1.14 1.05 -.09 .07Nevada 1.01 0.92 0.94 0.88 0.86 -.01 -.15New Hampshire 0.86 1.01 0.99 0.99 0.91 -.08 .05New Jersey 0.71 0.75 0.78 0.79 0.77 -.02 .05New Mexico 0.81 0.85 0.90 0.94 0.92 -.02 .11New York 0.78 0.77 0.84 0.84 0.82 -.02 .05North Carolina 0.76 0.78 0.84 0.90 0.92 .03 .16North Dakota 0.97 0.94 0.94 0.95 0.94 -.01 -.02Ohio 1.20 1.27 1.34 1.35 1.30 -.05 .10Oklahoma 1.31 1.35 1.31 1.40 1.38 -.02 .07Oregon 0.83 0.92 0.92 0.90 0.92 .02 .09Pennsylvania 1.29 1.27 1.29 1.30 1.26 -.04 -.03Rhode Island 0.90 0.93 0.94 0.82 0.86 .04 -.04South Carolina 1.07 1.08 1.19 1.28 1.29 .00 .22

continued on p.27

covered wages or employment could be high or lowin a given state for a number of reasons unrelated tothe adequacy of benefits that injured workers receive.

First, a state with more workers in high-risk indus-tries—such as mining or construction—may paymore benefits simply because they have a higher pro-portion of injured workers and more workers withserious, permanent disabilities that occurred on thejob.

Second, states differ considerably in their compens-ability rules—that is, the criteria they use for deter-mining whether an injury is work-related and there-fore will be paid by the workers’ compensation pro-gram. A state with a relatively lenient compensabilitythreshold might pay more cases, and therefore havehigher aggregate benefits relative to the total numberof workers in the state, yet pay below average bene-fits to workers with serious injuries.

Third, states have different policies about how theypay permanent disabilities. Some pay benefits for lifeor until retirement age. Others limit benefits for per-

manent disabilities to a few years or to a specifieddollar amount. Still others have policies that permitor encourage lump-sum settlements for permanentdisabilities. Differences in these policies can have amajor impact on the benefits a state actually pays ina given year, relative to the size of its total workforceor total covered wages.

Fourth, benefits actually paid in the year (which arethe data reported here) will be influenced by injuriesthat occurred in prior years. A state with a dispro-portionately large number of injured workers whoare being compensated for permanent disabilitiesthat occurred in the past would appear to pay aboveaverage benefits, when, in fact, the actual benefits forrecently injured workers may not be above average.Alternatively, a state with a long period of futurebenefit payments for current-year injuries mayappear to be below average on the basis of the cur-rent year’s payments when in fact the ultimate bene-fits required to be paid for recent injuries may beabove average.


Table 10 continued

State Workers' Compensation Benefits Per $100 of Covered Wages, by State, 2000–2004

Dollar Amount Change2000 2001 2002 2003 2004 2003-2004 2000-2004

South Dakota 0.74 0.80 0.81 0.78 0.77 -.01 .03Tennessee 1.03 1.09 0.98 1.04 1.04 .01 .01Texas 0.82 0.80 0.87 0.71 0.59 -.12 -.23Utah 0.59 0.66 0.70 0.61 0.67 .06 .07Vermont 1.23 1.11 1.34 1.31 1.33 .02 .11Virginia 0.55 0.52 0.54 0.59 0.59 .01 .05Washington 1.57 1.68 1.76 1.80 1.80 -.01 .23West Virginia 3.96 3.92 4.50 4.42 3.76 -.66 -.20Wisconsin 0.95 1.12 1.06 0.97 1.15 .18 .20Wyoming 1.52 1.59 1.64 1.67 1.63 -.04 .11Total non-federal 1.03 1.06 1.12 1.13 1.10 -.03 .07Federal Employeesa 1.60 1.65 1.61 1.57 1.54 -.03 -.05Total 1.06 1.10 1.16 1.16 1.13 -.03 .07

(a) includes FECA only.

Source: National Academy of Social Insurance estimates based on Tables 3, 8, D1, D2, D3 and D4.

Fifth, variations in state wages can lead to cross-statedifferences in benefits per covered worker. In a state,the mix of industries and occupations influenceswages. Because the cash component of benefits paidis linked to wages, states with higher wages will tendto pay higher benefits all else being equal. To someextent, this is controlled for when using benefits rela-tive to covered wages. However, because benefits arecapped to not exceed a maximum dollar amount,states with many highly paid workers could havelower benefits relative to covered wages.

Sixth, the demographic composition of the work-force varies among states. Younger workers are morelikely to experience injuries, but older workers areprone to certain chronic conditions that are relativelyexpensive.

Seventh, state economic activity can influence bene-fits per covered worker in other ways apart from dif-fering wage rates. A state experiencing a recessionwill have fewer workers and fewer people workingovertime. Furthermore, the reductions in hoursworked will probably not be distributed evenlyacross industries or occupations. This will affectthose who are working, what they are earning, andthe distribution of the type of injury or illness occurring.

Eighth, variations among states in both the price ofmedical care services and the variations in use of ser-vices and practice patterns will have an impact onthe amount of medical benefits paid.

Ninth and finally, in-migration or out-migration in astate will affect benefits per covered worker. Forexample, a state that is paying a large number of per-manently disabled workers from past years wouldhave rising benefits relative to its current work forceif it experienced substantial out-migration of healthyworkers, but could have declining benefits per work-er if it experienced substantial in-migration of unin-jured workers. Yet the benefits actually received bypermanently injured workers in that state may nothave changed.

Caveats on comparing employer costs acrossstates. An employer’s costs for workers’ compensa-tion in different states is best compared by knowingthe premiums that comparable employers arecharged in each state (Thomason et al., 2001). These

premiums would be affected by the employer’s insur-ance classification and its own experience with pastinjury rates and the severity of injuries its workerssustained. Data on aggregate benefits per worker, orrelative to total wages in the state do not provide thisinformation for the following reasons.

First, a company in a high-risk industry would notnecessarily experience lower costs if it moved to astate with predominantly low-risk industries, sincethe migrating company will still be in the high-riskinsurance classification.

Second, changes in state policies would affect newemployers, but these changes are not fully reflectedin our data on benefits relative to wages. Premiumscharged to employers in a given year are based onthe costs of injuries it is expected to incur in thatyear under policies in effect that year. If a state hadchanged its policies either to lower future costs or tomake future benefits more adequate, those policieswould not be fully reflected in benefits currentlybeing paid to workers in that state as shown in Table10. For example, a state that tightened its ruleswould be expected to have lower future costs for newemployers, yet it would not show lower benefits perworker immediately because it would continue topay workers who were permanently disabled in thepast under the old rules.

Third, employers’ costs for workers’ compensationnationally exceed the benefits paid to workersbecause of factors such as administrative costs andprofits (or losses) of private carriers. The relationshipof employers’ costs relative to workers’ benefits variesamong states because of various factors, such as theextent of competition in the workers’ compensationinsurance market.

In brief, state-level benefits paid per worker or rela-tive to total wages in the state are a way to standard-ize aggregate benefit payments between large andsmall states. However, much more refined data andanalyses are needed to assess the adequacy of benefitsthat individual workers receive, or the costs that par-ticular employers would incur in different states.

Employer CostsEmployer costs for workers’ compensation in 2004were $87.4 billion, an increase of 7.0 percent from


$81.7 billion in 2003 (Table 11). Relative to totalwages of covered workers, employer costs increasedby three cents to $1.76 per $100 of covered wages in2004, up from $1.73 per $100 of covered wages in2003 (Table 12).

For self-insured employers, the costs include benefitpayments made during the calendar year and theadministrative costs associated with providing thosebenefits. Because self-insured employers often do notseparately record administrative costs for workers’

compensation, their administrative costs must beestimated. They are assumed to be the same share ofbenefits as administrative costs for other insurers.This percentage is based on the ratio of administra-tive costs to total benefits as reported by privateinsurers to the National Association of InsuranceCommissioners. This ratio is based on direct lossadjustment expenses and expense for taxes, licenses,and fees. For more information on the self-insurancecosts estimates, see Appendix C. For the federal


Table 11

Employer Costs for Workers’ Compensation by Type of Insurer, 1987–2004(in millions)

% Private Carriers State Funds Federala Self-InsuranceYear Total Change Total % of Total Total % of Total Total % of Total Total % of Total

1987 $38,095 * $25,448 66.8 $5,515 14.5 $1,728 4.5 $5,404 14.21988 43,284 13.6 28,538 65.9 6,660 15.4 1,911 4.4 6,175 14.31989 47,955 10.8 31,853 66.4 7,231 15.1 1,956 4.1 6,915 14.41990 53,123 10.8 35,054 66.0 8,003 15.1 2,156 4.1 7,910 14.91991 55,216 3.9 35,713 64.7 8,698 15.8 2,128 3.9 8,677 15.71992 57,395 3.9 34,539 60.2 9,608 16.7 2,454 4.3 10,794 18.81993 60,819 6.0 35,596 58.5 10,902 17.9 2,530 4.2 11,791 19.41994 60,517 -0.5 33,997 56.2 11,235 18.6 2,490 4.1 12,795 21.11995 57,089 -5.7 31,554 55.3 10,512 18.4 2,556 4.5 12,467 21.81996 55,293 -3.1 30,453 55.1 10,190 18.4 2,601 4.7 12,049 21.81997 53,544 -3.2 29,862 55.8 8,021 15.0 3,358 6.3 12,303 23.01998 53,431 -0.2 30,377 56.9 7,926 14.8 3,471 6.5 11,657 21.81999 55,386 3.7 32,631 58.9 7,552 13.6 3,496 6.3 11,708 21.12000 58,565 5.7 35,673 60.9 8,823 15.1 3,620 6.2 10,449 17.82001 64,663 10.4 37,930 58.7 11,453 17.7 3,778 5.8 11,503 17.82002 73,870 14.2 41,589 56.3 14,552 19.7 3,898 5.3 13,832 18.72003 81,667 10.6 45,384 55.6 17,642 21.6 3,970 4.9 14,671 18.02004 87,402 7.0 48,695 55.7 19,157 21.9 4,073 4.7 15,478 17.7

(a) In all years, federal costs include those paid under the Federal Employees’ Compensation Act for civilian employees andthe portion of the Black Lung benefit program that is financed by employers and are paid through the federal Black LungDisability Trust Fund, including interest payments on past Trust Fund advances from the U.S. Treasury. In years before1997, federal costs also include the other part of the Black Lung program that is financed solely by federal funds. In1997–2003, federal costs also include a portion of employer-financed benefits under the Longshore and Harbor WorkersCompensation Act that are not reflected in state data—namely, costs paid by self-insured employers and by special fundsunder the LHWCA. See Appendix H for more information about federal programs.

Source: National Academy of Social Insurance estimates of costs for private carriers and state funds are based on informationfrom A.M. Best and direct contact with state agencies. Costs for federal programs are from the Department of Labor and theSocial Security Administration. Self-insured costs are based on information from the National Association of InsuranceCommissioners.

employee program, employer costs are benefits paidplus administrative costs (U.S. DOL, 2005a).For employers who purchase insurance from privatecarriers and state funds, costs consist of premiumswritten in the calendar year plus payments of bene-fits made under deductible provisions. The growinguse of large deductible policies complicates the mea-surement of benefits and costs. Under deductiblepolicies, the insurer pays all of the workers’ compen-sation insured benefits, but employers are responsiblefor reimbursing the insurers for those benefits up toa specified deductible amount. In return for accept-ing a policy with a deductible, the employer pays alower premium. Our industry sources of data do not

provide separate information on deductibles andmany states lack data on deductible payments.Consequently, these benefits had to be estimated, asdescribed in Appendix G.

According to these estimates, costs for employersinsuring through private carriers were $48.7 billionin 2004, or approximately 55.7 percent of totalcosts. Self-insurers accounted for 17.7 percent oftotal employer costs, state funds represented 21.9percent of costs, and federal programs were 4.7 per-cent (Table 11).


Table 12Workers’ Compensation Benefit* and Cost** Ratios, 1989–2004

Costs per Benefits per Benefits Medical Cash Benefits$100 of per $100 per $1 Benefits per per $100 of

Year Wages of Wages in Cost $100 of Wages Wages

1989 $2.04 $1.46 $0.72 $0.57 $0.891990 2.18 1.57 0.72 0.62 0.941991 2.16 1.65 0.76 0.66 0.991992 2.12 1.68 0.80 0.69 1.001993 2.16 1.61 0.75 0.66 0.951994 2.05 1.51 0.74 0.58 0.931995 1.82 1.38 0.76 0.53 0.851996 1.66 1.26 0.76 0.50 0.761997 1.49 1.18 0.79 0.48 0.701998 1.38 1.11 0.81 0.47 0.651999 1.33 1.10 0.82 0.46 0.642000 1.30 1.06 0.81 0.47 0.602001 1.40 1.10 0.78 0.50 0.602002 1.60 1.16 0.72 0.53 0.622003 1.73 1.16 0.67 0.54 0.622004 1.76 1.13 0.64 0.53 0.60

* Benefits are payments in the calendar year to injured workers and to providers of their medical care.** Costs are employer expenditures in the calendar year for workers’ compensation benefits, administrative costs, and/or

insurance premiums. Costs for self-insuring employers are benefits paid in the calendar year plus the administrative costsassociated with providing those benefits. Costs for employers who purchase insurance include the insurance premiumspaid during the calendar year plus the payments of benefits under large deductible plans during the year. The insurancepremiums must pay for all of the compensable consequences of the injuries that occur during the year, including the ben-efits paid in the current as well as future years.

Source: National Academy of Social Insurance estimates based on Tables 2, 4, and 11.

Trend in Benefit andCost RatiosTable 12 shows the trend in benefits paid andemployer costs per $100 of covered wages over thelast 16 years. For the first time since 2000, workers’compensation benefits relative to covered wages fell.Employers’ costs per $100 of covered wages haveincreased continuously since 2000. Nonetheless,employer costs of $1.76 per $100 of covered wagesin 2004 remain well below their peak level of $2.18per $100 of wages in 1990.

What accounts for the difference between benefitspaid to workers and costs to employers? For self-insured employers (or the federal employee pro-gram), the difference reflects our estimates of admin-istrative costs (or actual reported costs in the case ofthe federal program). For self-insuring employers,the costs in a calendar year pertain to benefits paidin the same year.

For insured benefits, the difference between employ-er costs and benefits to workers reflects additionalfactors. One major factor is that the premiums in acalendar year must pay for all of the compensableconsequences of the injuries that occur during theyear, including the benefits paid in the current aswell as future years. Thus, the premiums for 2004include benefit payments during the year for 2004injuries, plus reserves for payment of benefits for the2004 injuries in 2005 and after. In addition, premi-ums must cover expenses such as administrative andloss adjustment costs, taxes, profits or losses of insur-ance carriers, and contributions for special funds,which can include the support of workers’ compen-sation agencies.

Premiums paid by employers and benefits paid toworkers do not change at the same rate from year toyear for a number of reasons. First, benefits and pre-miums do not reflect the same time period in thesame way. Benefits are those actually paid to workersin a given year, including benefits paid for injuriesthat occurred in prior years. Premiums written in agiven year reflect the insurer’s expected future liabili-ties for injuries that occur in the year. From theemployer’s perspective, the premiums written reflectthe employer’s cost for the year. From the insurer’sperspective, the premiums reflect all future costs theinsurer expects to incur for injuries that occur in the

year. Thus, an increase in expected liabilities couldlead to an increase in premiums and a decline inexpected liabilities could lead to a decline in premi-ums. Second, premiums can be influenced by insur-ers’ past and anticipated investment returns onreserves that they set aside to cover future liabilities.Thus, a decline in investment returns would con-tribute to an increase in premiums, while animprovement in investment returns could lead to adecline in premiums. Finally, premiums reflect insur-ers’ profits (or losses), since the profitability (or lackthereof) will affect the extent of dividends, scheduleratings, and deviations offered by the insurers.

Work Injuries,Occupational Illnessand FatalitiesWhile national data are not available on the numberof persons who file workers’ compensation claims orreceive benefits in a given year, the Bureau of LaborStatistics collects information about work-relatedfatalities and nonfatal work injuries or occupationalillnesses and the NCCI has information on workers’compensation claims in thirty-nine states (NCCI,2005).

Fatalities at Work

A total of 5,764 fatal work injuries occurred in 2004(Table 13), which represent a 3.4 percent increase inthe number of fatalities from 2003. Transportationincidents continued to be the leading cause of on-thejob fatalities in 2004, accounting for 45 percent ofthe total. Violent acts (homicides, suicides and ani-mal attacks), falls, and contact with objects andequipment were the other leading causes of death,accounting for 18 percent, 15 percent, and 14 per-cent respectively (U.S. DOL, 2005b).

Nonfatal Injuries and Illnesses

A total of 4.3 million nonfatal workplace injuriesand illnesses were reported in private industry work-places during 2004, resulting in a rate of 4.8 casesper one hundred full-time equivalent workers,according to a Bureau of Labor Statistics survey ofprivate sector employers (U.S. DOL, 2005c). Manyof these cases involved relatively minor injuries thatdid not result in lost workdays. The frequency of allinjuries and illnesses declined from 8.9 per 100 full-


time workers in 1992 to 4.8 per 100 in 2004 (Table14).

A total of 1.3 million workplace injuries or illnessesthat required recuperation away from work beyondthe day of the incident were reported in privateindustry in 2004 (U.S. DOL, 2005d). The numberof reported injuries or illnesses per one hundred full-time workers declined from 3.0 in 1992 to 1.4 in2004 (Table 14). The median time away from workbeyond the day of the injury was eight days. Aboutone in four would not have met a three-day waitingperiod, and about 40 percent would not have met asix-day waiting period (U.S. DOL, 2005f).

A recent study indicates that the current nationalsystem for work-related injuries and illnesses, admin-istered by the BLS, markedly undercounts the totalnumber of injuries with chronic or acute conditions(Rosenman et al, 2006). The authors suggest a morecomprehensive surveillance system, not solely depen-dant on employer-based data sources, is needed forinformed decision-making on the allocation of pub-lic health resources.

Women are somewhat less likely than men to havereported workplace injuries that involve days away


Figure 4

Nature of Injury or Illness: Percent of Nonfatal Occupational Injuries and Illnesses InvolvingDays Away from Work, U.S. Private Industry, 2004

Source: Bureau of Labor Statistics, U.S. Department of Labor, March, 2005f

Carpal tunnel syndrome 1.5%

Cuts, Lacerations, Punctures 7.8%Cu

Bruises, Contusions 9.1%

Fractures 7.5%Heat Burns1.5%

All other injuries25.1%

Sprains and Strains 41.7%

Tendonitis, Chemical burns,Amputations 1.8%

Multiple Traumatic Injuries 4.0%

Table 13Number of Fatal Occupational Injuries,1992–2004

Year Number of Injuries

1992 6,2171993 6,3311994 6,6321995 6,2751996 6,2021997 6,2381998 6,0551999 6,0542000 5,9202001 8,801

September 11 events 2,886Other 5,915

2002 5,5342003 5,5752004 5,764

Source: U.S. DOL 2005c.http://www.bls.gov/iif/oshcfoi1.htm

from work. While women make up 41.1 percent ofthe total hours worked (U.S. DOL, 2006b), theyaccount for 33.8 percent of reported injuries thatinvolved days away from work (U.S. DOL, 2005a).

The most common causes of reported injuries or ill-nesses were: Sprains and strains, most often involvingthe back (41.7 percent); bruises and contusions (9.1percent); cuts, lacerations and punctures (7.8 per-cent); fractures (7.5 percent); carpal tunnel syn-drome (1.5 percent); heat burns (1.5 percent); andtendonitis, chemical burns and amputations (1.8percent) (Figure 4).

Workers’ Compensation Claims

The National Council on Compensation Insurancereports on the frequency of workers’ compensationclaims for privately insured employers and some statefunds in thirty-six states (Table 15). These data showdeclining trends similar to national trends in work-place injuries reported by the Bureau of LaborStatistics. Claims per 100,000 insured workersdeclined steadily between 1992 and 2001.Temporary total disability claims are those in whichdays away from work exceeded the three- to seven-day waiting period. The frequency of these claimsdeclined by about 41 percent (Table 15). This


Table 14

Private Industry Occupational Injury and Illness: Total Non-fatal Cases and Incidence Rates,1987–2004

Number of Cases (in millions) Incidence Rateb

All Cases Cases with Any Days All Cases Cases with Any DaysYeara Away from Work Away from Work

1987 6.0 2.5 8.3 3.41988 6.4 2.6 8.6 3.51989 6.6 2.6 8.6 3.41990 6.8 2.6 8.8 3.41991 6.3 2.6 8.4 3.21992 6.8 2.3 8.9 3.01993 6.7 2.3 8.5 2.91994 6.8 2.2 8.4 2.81995 6.6 2.0 8.1 2.51996 6.2 1.9 7.4 2.21997 6.1 1.8 7.1 2.11998 5.9 1.7 6.7 2.01999 5.7 1.7 6.3 1.92000 5.7 1.7 6.1 1.82001 5.2 1.5 5.7 1.72002c 4.7 1.4 5.3 1.62003 4.4 1.3 5.0 1.52004 4.3 1.3 4.8 1.4

a Data after 1991 exclude fatal work-related injuries and illnesses.b The incidence rate is the number of cases per one hundred full-time workers.c Data for 2002 and beyond are not strictly comparable to prior year data due to changes in OSHA recordkeeping

requirements.

Source: U.S. DOL 2005e.http://www.bls.gov/iif/home.htm

decline is very similar to the decline in injuriesreported by the BLS that involved days away fromwork. Between 1992 and 2001, the incidence ofinjuries that involved days away from work declinedby about 43 percent (from 3.0 per one hundred full-time workers in 1992 to 1.7 per one hundred full-time workers in 2001) (Table 14).

The frequency of total workers’ compensationclaims—including medical-only cases that involvelittle or no lost work time—declined by about 36percent between 1992 and 2001. This rate of declineis also very similar to the 36 percent decline in theincidence rate for all injuries reported to the BLS inthe same period (from 8.9 to 5.7 per one hundredfull-time workers between 1992 and 2001). Variousstudies indicate that some workplace injuries anddiseases do not show up as workers’ compensationclaims because workers don’t know they are eligibleor do not file for other reasons (Leigh and Robbins,2004; Leigh et al, 2000; Azaroff et al., 2002;Shannon and Lowe 2002; and Biddle et al., 1998).Other research suggests that tighter eligibility stan-dards and claims filing restrictions for workers’ com-

pensation may explain part of the decline in injuryrates as measured in BLS surveys. Boden and Ruser(2003) find that between 7.0 and 9.4 percent of thedecline in injury rates measured by BLS between1991 and 1997 is an indirect result of tighter eligi-bility standards and claims filing restrictions forworkers’ compensation. Fewer cases entered into theworkers’ compensation system could result in fewerinjuries reported to the BLS

Comparing Workers’Compensation withOther Disability BenefitProgramsOther sources of support for disabled workersinclude sick leave, short-term and long-term disabili-ty benefits, Social Security disability insurance, andMedicare. Unlike workers’ compensation, these pro-grams are not limited to injuries or illnesses causedon the job.


Table 15

Number of Workers' Compensation Claims per 100,000 Insured Workers: Private Carriers in Thirty-six Jurisdictions, 1992-2001

Total (including Policy Period Temporary Total Permanent partial medical only)

1992 1,358 694 8,5041993 1,331 644 8,2791994 1,300 565 7,8751995 1,217 459 7,3771996 1,124 419 6,8371997 1,070 414 6,7251998 977 452 6,4741999 909 459 6,3302000 862 430 5,9032001 797 417 5,431

Percent decline, 1992–2001 -41.3 -39.9 -36.1

Source: NCCI 1996; 1997; 1998; 1999; 2000; 2001; 2002; 2003a; 2004b, 2005

Other Disability Benefits

Sick leave is the most common form of wagereplacement for short-term absences from work dueto illness or injury. Benefits typically pay 100 percentof wages for a few weeks. Laws in five states requireshort-term disability insurance: California, Hawaii,New Jersey, New York, and Rhode Island. Thesestate programs generally pay benefits that replace halfof the worker’s lost earnings, subject to a maximumweekly benefit. Most programs pay benefits for up totwenty-six weeks, although California pays for up tofifty-two weeks. In California and Rhode Island, thebenefits are financed solely by employee contribu-tions. In Hawaii, New Jersey, and New York,employers also contribute. Workers in other statesmay have short-term disability insurance that isoffered and financed, at least in part, by employers.Benefits usually last for up to twenty-six weeks andtypically replace about half of the worker’s priorearnings. About 39 percent of private sector employ-ees were covered by short-term disability insurancein 2004 (U.S. DOL, 2005f).

An estimated 70 percent of all private sector work-ers have some coverage for temporary sickness ordisability other than workers’ compensation. Theyinclude 26 percent who have only sick leave, 20percent who have only temporary disability insur-ance, and 24 percent who have both (Mashaw andReno, 1996). Thus, about 30 percent of private sec-tor employees have no provision other than work-ers’ compensation for wage replacement duringtemporary absence from work due to sickness ordisability.

Long-term disability insurance that is financed, atleast in part, by employers, covers about 30 percentof private sector employees. Such coverage is mostcommon among white-collar workers. About 40 per-cent of white-collar workers, 21 percent of blue-col-lar workers, and 11 percent of service workers hadthis coverage as of March 2005 (U.S. DOL, 2005d).Long-term disability insurance benefits are usuallypaid after a waiting period of three to six months, orafter short-term disability benefits end. Long-termdisability insurance is generally designed to replace60 percent of earnings, although replacement rates ofbetween 50 percent and 66 percent are also com-mon. Almost all long-term disability insurance iscoordinated with Social Security disability benefitsand workers’ compensation benefits. That is, the

long-term disability benefits are reduced dollar fordollar by the social insurance benefits. For example,if Social Security benefits replaced 40 percent of theworker’s prior earnings, the long-term disability ben-efit would pay the balance to achieve a 60 percentreplacement. Long-term disability insurance is alsosold in individual policies, typically to high-earningprofessionals. Such individual policies are not includ-ed in these data.

Retirement benefits may also be available to workerswho become disabled. Most defined benefit pensionplans have some disability provision; benefits may beavailable at the time of disability or may continue toaccrue until retirement age. Defined contributionplans will often make funds in the employee’saccount available to a disabled worker withoutpenalty.

Social Security DisabilityInsurance and Medicare

Workers’ compensation is surpassed in size only bythe federal Social Security disability insurance pro-gram and the accompanying Medicare program inproviding cash and medical benefits to disabledworkers.

While Social Security disability benefits and workers’compensation are the nation’s two largest work-baseddisability benefit programs, the two programs differ,in many respects. Workers are eligible for workers’compensation benefits from their first day ofemployment, while Social Security disability benefitsrequire workers to have a substantial work history.Workers’ compensation provides benefits for bothshort-term and long-term disabilities, and for partialas well as total disabilities. These benefits cover onlythose disabilities arising out of and in the course ofemployment. Social Security disability benefits arepaid only to workers who have long-term impair-ments that preclude any gainful work. SocialSecurity disability benefits are provided whether thedisability arose on or off the job. By law, the benefitsare paid only to workers who are unable to engage inany substantial gainful activity by reason of a med-ically determinable physical or mental impairmentthat is expected to last a year or result in death. Theimpairment has to be of such severity that the work-er is not only unable to do his or her prior work, butis unable to do any substantial gainful work thatexists in the national economy. Social Security dis-


ability benefits begin after a five-month waiting peri-od. Medicare coverage begins for those on SocialSecurity disability benefits after a further twenty-four-month waiting period, or twenty-nine monthsafter the onset of disability.

Many who receive Social Security disability benefitshave impairments associated with aging. The portionof insured workers who receive benefits rises sharplyat older ages, from less than 1 percent of theyoungest insured workers to about 15 percent ofinsured workers age 60–64 (Reno and Eichner,2000). Relatively few individuals who receive SocialSecurity disability benefits return to work. Typically,they leave the disability benefit rolls when they dieor reach retirement age and shift to Social Securityretirement benefits.

While workers’ compensation paid $29.9 billion incash benefits and $26.1 billion for medical care in2004, Social Security paid $78.2 billion in wagereplacement benefits to disabled workers and theirdependents and Medicare paid $37.9 billion formedical and hospital care for disabled persons underage 65 (SSA 2006 and CMS, 2005). Thus, aggregateworkers’ compensation cash benefits were less than

half the total amount of Social Security disabilitybenefits, and workers’ compensation medical benefitswere less than three-fourth of the total amount paidby Medicare. Medicare benefits are less comprehen-sive than medical care under workers’ compensation.Medicare requires beneficiary cost sharing in theform of deductibles and co-insurance, and it doesnot cover certain services. At the same time,Medicare covers all medical conditions, not justwork-related injuries or illnesses. When a workerreceiving workers’ compensation is also Medicare eli-gible, Medicare is the secondary payer under theMedicare Secondary Payer Act.

Coordination between workers’

compensation and Social Security

disability benefits

If a worker becomes eligible for both workers’ com-pensation and Social Security disability benefits, oneof the programs will limit benefits in order to avoidexcessive payments relative to the worker’s past earn-ings. The Social Security amendments of 1965required that Social Security disability benefits bereduced, so that the combined total of workers’ com-pensation and Social Security disability benefits


Table 16

Social Security Disability Insurance (DI) Beneficiaries with Workers' Compensation (WC) orPublic Disability Benefit (PDB) Involvement, December 2005

BeneficiariesTotal Workers Auxilliaries

Type of Case Number Percent Number Percent Number Percent

All disability insurance beneficiaries 8,305,702 100.0 6,518,989 100.0 1,786,713 100.0

Total with some connection to WC or PDB 1,440,772 17.3 1,065,004 16.3 375,768 21.0

Current connection to WC or PDB 798,476 9.6 590,658 9.1 207,818 11.6DI reduced by cap 192,948 2.3 128,852 2.0 64,096 3.6DI not reduced by cap 346,707 4.2 269,567 4.1 77,140 4.3Reverse jurisdiction 59,695 .7 45,179 .7 14,516 0.8Pending decision on WC or PDB 199,126 2.4 147,060 2.3 52,066 2.9

DI previously offset for WC or PDB 642,296 7.7 474,346 7.3 167,950 9.4

Source: Quarterly Workers’ Compensation Extract and the Disabled Beneficiaries and Dependents files, SSA, 2005b

would not exceed 80 percent of the workers’ priorearnings.1 States, however, were allowed to establishreverse offset laws, whereby workers’ compensationpayments would be reduced if the worker receivedSocial Security disability benefits. The reverse offsetshifts costs to Social Security that would otherwisefall upon the employer or insurer. Legislation in1981 eliminated the states’ option to adopt reverseoffset laws, but the sixteen states that already hadsuch laws were allowed to keep them.2

As of December 2005, about 8.3 million disabledworkers and their dependents received SocialSecurity disability benefits (Table 16). About 1.4million of these individuals (or 17.3 percent) hadsome connection to workers’ compensation or someform of public disability benefits. Of these, 0.8 mil-lion (or 10 percent of the total) had their social secu-

rity benefits reduced at some time on account of theoffset.

Trends in Social Security Disability

Benefits and Workers’ Compensation

Figure 5 illustrates the long-term trend in SocialSecurity disability benefits and workers’ compensa-tion as a share of covered wages. Social Security dis-ability benefits grew rapidly in the early 1970s andthen declined through the late 1980s, after policychanges in the late 1970s and early 1980s reducedbenefits and tightened eligibility rules. From 1990 to1996, Social Security benefits again rose as claimsand allowances increased, particularly during theeconomic recession of 1990–1991. Between 1996-2001, disability insurance benefits relative to coveredwages leveled off and then rose again following therecession of 2001.


Figure 5

Social Security Disability Insurance and Workers’ Compensation Benefits as a Percent of Wages,1970-2004

* Starting in 1989, a new method was used to estimate covered wages for the workers' compensation program thataccounts for the decrease of benefits as a percent of covered wages in that year.

Source: National Academy of Social Insurance and the Office of the Chief Actuary, Social Security Administration.

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1.8

Social Security Disability Insurance

Workers’ Compensation

200219981994199019861982197819741970 2004

1 The current cap remains at 80 percent of the worker’s average indexed earnings before disability. However, in the relatively few cases where Social Security disability benefits alone, for the worker and dependents, amount to more than the 80 percent of prior earnings,the benefits are not reduced below the DI amount.

2States with reverse offset laws are: California, Colorado, Florida, Hawaii, Illinois, Louisiana, Minnesota, Montana, Nevada, NewJersey, New York, North Dakota, Ohio, Oregon, Washington, and Wisconsin.

The trend in workers’ compensation benefits as ashare of covered wages followed a different pattern.Total workers’ compensation benefits (cash and med-ical combined) were less than Social Security disabili-ty benefits during the 1970s, but grew steadilythroughout the 1970s and surpassed Social Securitydisability benefits in the mid-1980s. When SocialSecurity benefits flattened out during the mid-1980s,workers’ compensation payments continued to growat a rapid rate. Then, as workers’ compensation pay-ments declined as a share of covered wages in1992–2000, Social Security benefits rose.

The opposite trends in workers’ compensation andSocial Security disability benefits during much of thelast twenty-five years raise the question of whetherretrenchments in one program increase demandsplaced on the other, and vice versa. The substi-tutability of Social Security disability benefits andworkers’ compensation for workers with severe, long-term disabilities that are, at least arguably, work relat-

ed, or might be exacerbated by the demands ofwork, has received little attention by researchers andis not well understood (Burton and Spieler, 2001).A recent study finds that work-related disabilities aremuch more common than might previously havebeen thought, both among older persons in generaland among recipients of Social Security disabilitybenefits in particular (Reville and Schoeni, 2005).Based on reports in the 1992 Health and RetirementStudy, more than one third (36 percent) of 51-61year olds whose health limits the amount of workthey can do became disabled because of an accident,injury, or illness at work. Of those receiving SocialSecurity disability insurance, a similar portion (37percent) attributed their disability to an accident,injury or illness at work. The study also finds thatthe 51–61 year olds who attribute their disablingconditions to their jobs are far more likely to receiveSocial Security disability insurance (29.0 percent)than to report ever having received workers’ compen-sation (12.3 percent).


Table 17

Comparison of Accident-Year Incurred Losses with Calendar-Year Benefits Paid by PrivateCarriers and State Funds in Thirty-six States, 2000–2004

Accident year incurred lossesa Calendar year benefits paidb

Year Billions of dollars Percent Change Billions of dollars Percent change

2000 12.0 12.52001 12.3 2.4 12.8 2.62002 12.0 -2.7 13.0 1.12003 11.9 -.8 13.2 1.92004 12.4 4.4 13.1 -.8

Cumulative % change from 2000-2004 3.2 4.8

(a) These data are for the thirty-seven states reported in the Calendar-Accident Year Underwriting Results of the NationalCouncil on Compensation Insurance, page 17. They include private carrier and state fund (where relevant) losses incurredin Alabama, Alaska, Arizona, Arkansas, Colorado, Connecticut, the District of Columbia, Florida, Georgia, Hawaii,Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Mississippi, Missouri, Montana, Nebraska,Nevada, New Hampshire, New Mexico, North Carolina, Oklahoma, Oregon, Rhode Island, South Carolina, SouthDakota, Tennessee, Texas, Utah, Vermont, and Virginia.

Accident year data exclude benefits paid under the following categories: underground coal mining, F-classification,national defense project, and excess business. The accident year data also exclude benefits paid under deductible policies.

(b) Based on National Academy of Social Insurance data in this report for the states listed in note (a). These data are for pri-vate carriers and states funds (where relevant) and excludes benefits paid under deductible policies.

Source: NCCI 2005 and calendar year benefits estimated by the National Academy of Social Insurance.

Incurred LossesCompared withBenefits PaidThe Academy’s estimates of workers’ compensationbenefits in this report are the amounts paid to work-ers in a calendar year regardless of whether theinjuries occurred in the current year or a past year.This measure, calendar year benefits paid, is common-ly used in reporting about other social insurance, pri-vate employee benefits, and other income securityprograms. A different measure, accident year incurredlosses, is commonly used for workers’ compensationinsurance that is purchased from private carriers andsome state funds. It measures benefit liabilitiesincurred by the insurer for injuries that occur in aparticular year, regardless of whether the benefits arepaid in the current year or a future year. (The termlosses and benefits are used interchangeably becausebenefits to the worker are losses to the insurer.) Bothmeasures, calendar year benefits paid and accidentyear losses incurred, reveal important information.3

For the purpose of setting insurance premiums, it isvital to estimate the incurred losses that the premi-ums are to cover. When an employer purchasesworkers’ compensation insurance for a particularyear, the premiums cover current and future benefitliabilities for all injuries that occur during the policyyear. State rating bureaus and the National Councilon Compensation Insurance, which provides adviso-ry ratemaking and statistical services in thirty-sixstates, focus on accident year (or policy year)incurred losses.

Accident year incurred losses are considered moresensitive at picking up ultimate benefits that will beowed to newly injured workers in response to policychanges. For example, if a state lowered benefits ortightened compensability rules for new injuries as ofa given date, then future benefits would be expected

to decline. Similarly, if a state raised benefits orexpanded the range of injuries that would be com-pensated by workers’ compensation, then future ben-efits would be expected to increase. The policychange would show up immediately in estimates ofaccident year incurred losses, but it would show upmore slowly in measures of calendar year benefitspaid because the latter measure includes paymentsfor past injuries that would not be affected by thepolicy change.

A disadvantage of relying solely on accident yearincurred losses is that it takes many years before thelosses from a particular year are actually known; inthe meantime, estimates for the losses for that acci-dent year are updated annually. The NationalCouncil on Compensation Insurance updates acci-dent year incurred losses for sixteen years before thedata for a particular year are considered final. In con-trast, calendar year benefits paid are final at the endof the calendar year.

Accident year incurred losses are estimated for insur-ance policies purchased from private carriers andfrom some state funds, but this information is notroutinely available for other state funds and for self-insured employers. In addition, accident year dataexclude benefits under large deductible policies andall benefits of certain categories of privately insuredemployers. For the years 2000 through 2004, Table17 compares accident year losses incurred reported bythe National Council on Compensation Insuranceand calendar year benefits paid estimated by theNational Academy of Social Insurance for privatecarriers and state funds in the thirty-seven statesincluded in the NCCI data. From year to year, thetwo measures change at different rates, although overan extended period, the two measures tend to besimilar. Between 2000 and 2004, the cumulativeincrease in benefits paid was 4.8 percent comparedto a 3.2 percent increase for accident year incurredlosses.


3 A fuller discussion of these measures is in Thomason et al. 2001, Appendix B.


GlossaryAASCIF: The American Association of StateCompensation Insurance Funds (AASCIF) is anassociation of workers' compensation insurance enti-ties – loosely referred to as state funds – that special-ize in writing workers' compensation insurance in asingle U.S. state or Canadian province. For moreinformation, visit www.aascif.org.

Accident Year: The year in which an injuryoccurred, or the year of onset of an illness. Accidentyear benefits refer to the benefits associated with allinjuries and illnesses occurring in that year, regardlessof the year they were actually paid.

BLS: The Bureau of Labor Statistics (BLS) in theU.S. Department of Labor is a statistical agency thatcollects, processes, analyzes, and disseminates statisti-cal data about the labor market. For more informa-tion, visit www.bls.gov.

Calendar year benefits: Benefits paid to workers ina given year, regardless of when the injury or illnessoccurred.

Combined operating ratio: The ratio of underwrit-ing results to premiums. It is the ratio of paymentsmade by insurers to premiums collected. It does nottake into account income that insurers receive fromthe investment of their reserves.

Covered employment: Jobs that are covered byworkers’ compensation programs.

CPS: The Current Population Survey (CPS) is amonthly survey of about U.S. 50,000 householdsconducted by the Bureau of the Census for theBureau of Labor Statistics. It is the primary source ofinformation on the labor force characteristics of theU.S. population. For more information, visitwww.bls.census.gov/cps.

Deductibles: Under deductible policies written byprivate carriers or state funds, the insurer pays all ofthe workers’ compensation benefits, but employersare responsible for reimbursing the insurer for thosebenefits up to a specified deductible amount.Deductibles may be written into an insurance policyon a per-injury basis, or an aggregate basis, or a com-bination of a per-injury basis with an aggregate cap.

DI: Disability insurance from the Social Securityprogram. See SSDI.

FECA: The Federal Employees' Compensation Act(FECA) provides workers' compensation coverage tothree million federal civilian and postal workersaround the world for employment-related injuriesand occupational diseases.

Incurred losses: Losses paid to date plus liabilitiesfor future benefits for injuries that occurred in aspecified period.

Loss adjustment expenses: Salaries and fees paid toadjusters, as well as other expenses incurred fromadjusting claims.

Losses: Benefits paid by insurers.

Managed Care: A system of health care payment ordelivery arrangements where the health planattempts to control or coordinate use of health ser-vices by its enrolled members in order to containhealth expenditures, improve quality, or both.Arrangements often involve a defined delivery systemof providers with some form of contractual arrange-ment with the plan.

NAIC: The National Association of InsuranceCommissioners (NAIC) is the national organizationof insurance regulators in each state. It assists stateinsurance regulators, individually and collectively, toachieve insurance regulatory goals. For more infor-mation, visit www.naic.org.

NCCI: National Council on CompensationInsurance, Inc. (NCCI) is a national organizationthat assists private carriers and insurance commis-sioners in setting workers’ compensation rates inthirty-seven states. For more information, visitwww.ncci.com.

Overall Operating Ratio: The ratio of [(1) the totalof all carrier expenditures, including losses, lossadjustment expenses, underwriting expenses, anddividends (2) minus investment income earned bycarriers on their reserves] (3) divided by premiums.

Permanent Partial Disability (PPD): A disabilitythat, although permanent, does not completely limita person’s ability to work.


Permanent Total Disability (PTD): A permanentdisability that precludes all work.

Residual Market: The mechanism used to provideinsurance for employers who are unable to purchaseinsurance in the voluntary private market. In somestates the state fund is the “insurer of last resort.” Inothers, there is a separate pool financed by assess-ments of private insurers, which is also known as anassigned risk pool.

SSA: The U.S. Social Security Administration (SSA)administers the Social Security program, which paysretirement, disability and survivors’ benefits to work-ers and their families, and the federal SupplementalSecurity Income program that provides income sup-port benefits to low-income aged and disabled indi-viduals. For more information, visit www.ssa.gov.

SSDI: Social Security disability insurance (SSDI)pays benefits to insured workers who sustain severe,long-term work disabilities of any cause. Also, DI.

Temporary Partial Disability (TPD): A temporarydisability that does not completely limit a person’sability to work.

Temporary Total Disability (TTD): A disabilitythat temporarily precludes a person from performingthe pre-injury job or another job at the employerthat the worker could have performed prior to theinjury.

Underwriting expenses: Commissions, brokerageexpenses, general expenses, taxes, licenses, and fees.

Underwriting results: The sum of losses, loss adjust-ment expenses, and underwriting expenses.

Unemployment insurance (UI): Federal-state pro-gram that provides cash benefits to workers whobecome unemployed through no fault of their ownand who meet certain eligibility criteria set by thestates.

USDOL: The U.S. Department of LaborDepartment administers a variety of Federal laborlaws including those that guarantee workers’ rights tosafe and healthful working conditions; a minimumhourly wage and overtime pay, freedom fromemployment discrimination, unemployment insur-ance, and other income support. For more informa-tion, visit www.dol.gov.

WC: Workers’ compensation.

Work related injury-illness: An injury or illnessthat arises out of and in the course of employment.The definition of a work-related injury or diseasethat is compensable under a state’s workers’ compen-sation program can be quite complex and variesacross states.


The National Academy of Social Insurance’s esti-mates of workers’ compensation coverage start withthe number of workers in each state who are coveredby Unemployment Insurance (UI) (U.S. DOL,2005e). Almost 92 or 93 percent (U.S. DOL,2005b) of workers are covered by UI. Those who arenot required to be covered include: Some farm anddomestic workers who earn less than a thresholdamount from one employer; some state and localemployees, such as elected officials; employees ofsome non-profit entities, such as religious organiza-tions, for whom coverage is optional in some states;unpaid family workers; and railroad employees whoare covered under a separate unemployment insur-ance program. Railroad workers are also not coveredby state workers’ compensation because they haveother arrangements (NASI, 2002).

The largest groups of workers who are not coveredunder either unemployment insurance or workers’compensation are self-employed individuals whohave not incorporated their businesses.

All U.S. employers who are required to pay unem-ployment taxes must report quarterly to their stateemployment security agencies information abouttheir employees and payroll covered by unemploy-ment insurance. These employer reports are the basisfor statistical reports prepared by the U.S. Bureau ofLabor Statistics, known as the ES-202 data. Thesedata are a census of the universe of U.S. workerswho are covered by unemployment insurance.

Key assumptions underlying NASI estimates ofworkers’ compensation coverage are: (1) Workerswhose employers do not report that they are coveredby UI are not covered by workers’ compensation. (2) Workers that report they are covered by UI aregenerally covered by workers’ compensation as well,except in the following cases:

(a) Workers in small firms (which are required toprovide UI coverage in every state) are not cov-ered by workers’ compensation if the state lawexempts small firms from mandatory workers’compensation coverage.

(b) Employees in agricultural industries (who maybe covered by UI) are not covered by workers’

compensation if the state law exempts agricul-tural employers from mandatory workers’ com-pensation coverage.

(c) In Texas, where workers’ compensation cover-age is elective for almost all employers, esti-mates are based on periodic surveys conductedby the Texas Research and Oversight Council.

All federal employees are covered by workers’ com-pensation, regardless of the state in which they work.

Small Firm Exemptions. NASI assumes that work-ers are not covered by workers’ compensation if theywork for small firms in the fourteen states thatexempt small employers from mandatory coverage.Private firms with fewer than three employees areexempt from mandatory coverage in eight states:Arkansas, Colorado, Georgia, Michigan, NewMexico, North Carolina, Virginia, and Wisconsin.Those with fewer than four employees are exempt intwo states: Florida, and South Carolina. Finally,firms with fewer than five employees are exemptfrom mandatory coverage in Alabama, Mississippi,Missouri, and Tennessee (U.S. DOL, 2004; AFL-CIO, 2003).

The number of employees in small firms is estimatedusing data from the U.S. Small Business Admini-stration for each state, which show the proportion ofemployees in all private firms who worked for firmswith fewer than five employees in 2002 (the mostrecent year for which data are available). Those per-centages for the fourteen states with numericalexemptions are: Alabama, 5.1 percent; Arkansas, 5.2percent; Colorado, 6.0 percent; Florida, 6 percent;Georgia, 4.7 percent; Michigan, 4.6 percent;Mississippi, 5.3 percent; Missouri, 4.9 percent; NewMexico, 6.1 percent; North Carolina, 4.8 percent;South Carolina, 5.0 percent; Tennessee, 4.3 percent;Virginia, 4.7 percent; and Wisconsin, 4.5 percent(U.S. SBA, 2002).

To estimate the proportion of workers in firms withfewer than three or four employees, we used nationaldata on small firms from the U. S. Census Bureau(U.S. Census Bureau, 1999). Of workers in firmswith fewer than five employees, 78.6 percent workedin firms with fewer than four employees and 56.5percent worked in firms with fewer than three

Appendix A: Coverage Estimates


Tab

le A

1

Doc

umen

ting

Wor

kers

’ Com

pens

atio

n C

over

age

Est

imat

es, 2

004

Ann

ual A

vera

ges

UI

Cov

ered

Job

saW

orke

rs’ C

ompe

nsat

ion

Exe

mpt

ions

Priv

ate,

non

-W

C C

over

edW

C a

s a

Stat

eTo

tal

farm

firm

sSm

all F

irm

Agr

icul

ture

Texa

sJo

bs%

of U

I

Ala

bam

a1,

800,

817

1,50

3,42

5 74

,669

5,

821

-

1,72

0,32

7 95

.5A

lask

a27

9,10

9 22

0,33

7 -

27

9,10

9 10

0.0

Ari

zona

2,30

3,55

8 1,

966,

286

-

2,30

3,55

8 10

0.0

Ark

ansa

s1,

108,

379

934,

416

27,6

42

7,76

7 -

1,

072,

970

96.8

Cal

iforn

ia14

,705

,788

12

,404

,480

-

14

,705

,788

10

0.0

Col

orad

o2,

089,

688

1,78

8,73

0 15

,480

-

2,

074,

208

99.3

Con

nect

icut

1,61

1,11

2 1,

393,

149

-

1,61

1,11

2 10

0.0

Del

awar

e40

5,91

5 35

4,84

7 -

40

5,91

5 10

0.0

Dist

rict

of C

olum

bia

466,

907

429,

192

-

466,

907

100.

0Fl

orid

a7,

337,

314

6,36

1,95

9 29

7,94

9 -

7,

039,

365

95.9

Geo

rgia

3,74

7,43

3 3,

191,

766

84,1

77

-

3,66

3,25

6 97

.8H

awai

i55

3,65

5 46

1,88

9 -

55

3,65

5 10

0.0

Idah

o57

8,03

0 46

7,97

6 -

57

8,03

0 10

0.0

Illin

ois

5,61

0,84

8 4,

883,

026

-

5,61

0,84

8 10

0.0

Indi

ana

2,81

2,61

0 2,

441,

065

10,6

79

-

2,80

1,93

1 99

.6Io

wa

1,40

4,19

8 1,

184,

882

-

1,40

4,19

8 10

0.0

Kan

sas

1,27

0,89

3 1,

051,

175

7,80

5 -

1,

263,

088

99.4

Ken

tuck

y1,

692,

099

1,43

5,46

8 3,

726

-

1,68

8,37

3 99

.8Lo

uisi

ana

1,83

1,03

7 1,

494,

838

-

1,83

1,03

7 10

0.0

Mai

ne58

3,22

8 49

5,31

7 -

58

3,22

8 10

0.0

Mar

ylan

d2,

332,

478

2,01

0,67

4 -

2,

332,

478

100.

0M

assa

chus

etts

3,08

6,56

6 2,

736,

028

-

3,08

6,56

6 10

0.0

Mic

higa

n4,

246,

261

3,64

4,92

0 94

,167

-

4,

152,

094

97.8

Min

neso

ta2,

566,

853

2,21

6,71

1 -

2,

566,

853

100.

0M

issis

sipp

i1,

080,

480

862,

770

46,0

76

8,50

7 -

1,

025,

897

94.9

Mis

sour

i2,

573,

559

2,20

5,57

5 10

7,84

3 -

2,

465,

716

95.8


Mon

tana

389,

598

320,

851

-

389,

598

100.

0N

ebra

ska

865,

721

721,

943

-

865,

721

100.

0N

evad

a1,

129,

260

1,00

8,31

9 1,

948

-

1,12

7,31

2 99

.8N

ew H

amps

hire

605,

449

528,

268

-

605,

449

100.

0N

ew J

erse

y3,

811,

742

3,26

6,76

5 -

3,

811,

742

100.

0N

ew M

exic

o73

0,90

5 57

4,10

3 19

,614

8,

280

-

703,

011

96.2

New

Yor

k8,

142,

195

6,83

5,42

7 -

8,

142,

195

100.

0N

orth

Car

olin

a3,

718,

541

3,11

9,64

2 85

,248

-

3,

633,

293

97.7

N

orth

Dak

ota

311,

017

255,

826

2,20

0 -

30

8,81

7 99

.3

Ohi

o5,

213,

956

4,52

1,10

2 -

5,

213,

956

100.

0O

klah

oma

1,38

1,67

8 1,

124,

964

-

1,38

1,67

8 10

0.0

Ore

gon

1,56

4,81

4 1,

314,

355

-

1,56

4,81

4 10

0.0

Penn

sylv

ania

5,38

9,85

2 4,

761,

470

-

5,38

9,85

2 10

0.0

Rho

de I

sland

465,

893

411,

517

19,0

49

b-

44

6,84

4 95

.9So

uth

Car

olin

a1,

761,

336

1,46

9,87

8 57

,714

6,

785

-

1,69

6,83

7 96

.3So

uth

Dak

ota

358,

397

298,

014

-

358,

397

100.

0Te

nnes

see

2,59

4,69

0 2,

242,

106

95,9

99

4,80

7 -

2,

493,

884

96.1

Texa

s9,

143,

161

7,65

0,10

1 2,

194,

359

6,94

8,80

2 76

.0U

tah

1,03

7,07

5 88

1,13

0 -

1,

037,

075

100.

0V

erm

ont

292,

207

246,

276

-

292,

207

100.

0V

irgi

nia

3,34

4,14

1 2,

849,

735

76,0

54

-

3,26

8,08

7 97

.7W

ashi

ngto

n2,

625,

241

2,13

4,98

9 -

2,

625,

241

100.

0W

est V

irgi

nia

665,

125

549,

620

-

665,

125

100.

0W

iscon

sin2,

685,

370

2,32

1,01

4 59

,014

-

2,

626,

356

97.8

Wyo

min

g24

0,45

0 18

5,81

0 -

24

0,45

0 10

0.0

U.S

. non

-fed

eral

126,

546,

629

107,

734,

126

1,16

0,69

6 68

,325

2,

194,

359

123,

123,

249

97.3

Fede

ral

2,73

9,61

0 -

2,

739,

610

100.

0U

.S. T

OT

AL

129,

286,

239

107,

734,

126

1,16

0,69

6 68

,325

2,

194,

359

125,

862,

859

97.4

aU

I-co

vere

d em

ploy

men

t re

port

ed in

the

ET

A-2

02 d

ata

prod

uced

by

the

Uni

ted

Stat

es B

urea

u of

Lab

or S

tatis

tics.

bD

ata

not

avai

labl

e fo

r 20

04, a

pplie

d 20

02 d

ata.

Sour

ce: N

atio

nal A

cade

my

of S

ocia

l Ins

uran

ce e

stim

ates

.

44 NATIONAL ACADEMY OF SOCIAL INSURANCE44 NATIONAL ACADEMY OF SOCIAL INSURANCE

Tab

le A

2

Cov

ered

Pay

roll

1989

-199

9 (i

n m

illio

ns)

Stat

e19

8919

9019

9119

9219

9319

9419

9519

9619

9719

9819

99

Ala

bam

a27

,510

29,3

5930

,675

32,8

2534

,396

36,4

5238

,784

40,7

2343

,240

45,6

3148

,038

Ala

ska

6,03

96,

378

6,66

56,

981

7,22

37,

530

7,65

97,

661

7,91

38,

256

8,38

2A

rizo

na29

,399

30,8

4531

,926

33,9

6236

,181

39,8

5243

,949

48,3

1052

,928

58,9

5763

,711

Ark

ansa

s14

,141

15,2

4016

,071

17,5

2118

,335

19,6

5721

,025

22,0

9123

,482

25,0

4826

,505

Cal

iforn

ia31

3,94

633

6,86

234

0,43

434

9,67

735

0,28

636

0,47

138

0,56

040

5,94

244

2,33

348

2,12

052

8,46

8C

olor

ado

30,5

3732

,717

34,7

5937

,582

40,3

1343

,293

47,0

1251

,234

56,3

7663

,161

69,5

91C

onne

ctic

ut44

,884

46,1

7146

,442

48,1

9049

,164

50,6

5653

,272

56,3

0261

,195

65,5

0769

,550

Del

awar

e7,

736

8,19

98,

451

8,72

09,

014

9,49

510

,215

11,0

3911

,926

12,9

8013

,858

Dist

rict

of C

olum

bia

13,5

4914

,196

14,2

5614

,828

15,1

3215

,643

15,9

9116

,629

17,4

0218

,650

20,6

22Fl

orid

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105,

201

108,

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114,

856

121,

822

129,

044

137,

876

147,

388

158,

197

173,

808

184,

929

Geo

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56,9

2660

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62,0

4766

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70,7

9275

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82,6

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96,7

7910

6,54

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11,3

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739

127,

962

131,

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139,

116

144,

370

151,

763

161,

181

170,

070

182,

787

196,

468

208,

109

Indi

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48,9

2951

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53,2

8256

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59,6

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67,6

6271

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75,4

5681

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85,3

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20,8

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Workers’ Compensation: Benefits, Coverage, and Costs, 2004 • 45Workers’ Compensation: Benefits, Coverage, and Costs, 2004 • 45

Mon

tana

4,47

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5,08

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5,83

66,

175

6,51

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7,30

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11,6

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13,2

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13,4

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18,3

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22,7

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Jer

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94,3

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16,3

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7,34

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8,70

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7,91

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224

5,46

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1,58

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4,62

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8,39

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3,09

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orth

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65,5

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4,06

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108,

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114,

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116,

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123,

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126,

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131,

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137,

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173,

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8,97

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esse

e38

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40,5

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45,9

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52,6

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59,3

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68,2

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s11

2,63

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1,98

412

9,33

813

8,07

314

4,78

915

2,84

916

4,31

117

6,98

419

7,49

522

0,44

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8,03

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tah

11,7

7112

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13,8

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16,1

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19,5

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23,6

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nia

54,6

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58,2

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64,4

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72,4

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84,3

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718

Was

hing

ton

41,6

7346

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49,3

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55,3

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61,6

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74,3

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91,5

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11,2

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12,3

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13,3

5314

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14,6

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15,7

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sin41

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44,9

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50,4

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56,4

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min

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340

3,59

33,

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3,94

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4,34

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465

4,60

14,

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5,13

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2,26

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.


employees. These ratios were applied to the percent-age of workers in firms with fewer than five employ-ees in the respective states. For example, the propor-tion of Arkansas private sector workers in firms withfewer than three employees is: (5.4 percent) x (56.5percent) = 3.05 percent. These ratios are applied tothe number of UI covered workers in private, non-farm firms in each state. In the fourteen Statestogether, we estimate that 1.2 million workers wereexcluded from workers’ compensation coverage in2004 because of the small employer exclusion frommandatory coverage.

Agricultural Exemptions. We estimate agriculturalworkers to be excluded from workers’ compensationcoverage if they work in the sixteen states where agri-cultural employers are exempt from mandatory cov-erage. These states are: Alabama, Arkansas,Delaware, Georgia, Indiana, Kansas, Kentucky,Missouri, Mississippi, North Dakota, Nebraska, NewMexico, Nevada, Rhode Island, South Carolina, andTennessee. In each of these jurisdictions, we subtractfrom UI coverage those workers employed in agricul-tural industries.

Texas. In Texas, where workers’ compensation cover-age is elective for almost all employers, the NASI

estimate of coverage is based on periodic surveysconducted by the Texas Workers’ CompensationResearch Institute and the Texas Department ofInsurance, which found 76.0 percent of Texasemployees were covered in 2004 (TDI et al, 2004).This ratio was applied to all UI-covered Texasemployees other than federal government workers(who were not included in the surveys cited above).A prior survey in 2001 found that 84.0 percent ofnon-federal workers in Texas were covered (Shieldsand Campbell, 2001). We revised our past coverageestimate in Texas to 78.6 percent in 2003 and 81.3in 2002 to phase in the decline from 84.0 percent in2001 to 76.0 percent in 2004.

Table A2 provides estimates of covered wages bystate for the period 1989-1999. Estimates for 1997-1999 follow methods described in this appendix toestimate coverage in each state. For earlier years, the1997 ratio (of workers’ compensation covered pay-roll to total UI covered payroll) in each state is usedto estimate workers’ compensation covered payroll,drawing on UI-covered payroll data provided by theU.S. Bureau of Labor Statistics.


Appendix B: Questionnaire for State Agencies


Estimates of benefits paid and employer costs forworkers’ compensation by the National Academy ofSocial Insurance (NASI) rely on two main sources:Responses to the NASI survey questionnaire fromstate agencies and data purchased from A.M. Best, aprivate company that specializes in collecting insur-ance data and rating insurance companies.

The A.M. Best data show the experience of privatecarriers in every state, but do not include any infor-mation about self-insured employers or about bene-fits paid under deductible arrangements. The A.M.Best data show total “direct losses” (that is, benefits)paid in each state in 2000–2004, by private carriersand by twenty-one entities that we classify as statefunds, based on their membership in the AmericanAssociation of State Compensation Insurance Funds.A.M. Best did not provide information on the statefund in Colorado, Montana, Oklahoma, SouthCarolina, or on exclusive state funds in Ohio, NorthDakota, Washington, West Virginia, and Wyoming.

The 2004 NASI survey questionnaire for state agen-cies asked states to report data for five years, from2000 through 2004. These historical data were usedto revise and update estimates for these past years.

In Table C-1, the shaded areas indicate the informa-tion provided by each state in response to the survey.

Private Carrier Benefits

Of the fifty-one jurisdictions, forty-six allow privatecarriers to write workers’ compensation policies. Ofthese, twenty-three jurisdictions were able to providedata on the amount of benefits paid by private carri-ers. In the other states, A.M. Best data were used toestimate private carrier benefits. An estimate of bene-fits paid under deductible policies were added tobenefits paid reported by A.M. Best to estimate totalprivate carrier benefits in these states. Methods forestimating deductible amounts are described inAppendix G.

State Fund Benefits

Twenty-six states have a state fund for writing work-ers’ compensation policies. Of these, thirteen wereable to provide benefit data. A.M. Best data andNAIC (National Association of InsuranceCommissioners) data were used to estimate state

fund benefits in states unable to provide the data. Anestimate of benefits paid under deductible policieswas added to benefits reported by A.M. Best to esti-mate total state fund benefits in these states.

Self-Insured Benefits

All jurisdictions except North Dakota and Wyomingallow employers to self-insure. Twenty-eight of thesejurisdictions were able to provide data on benefitspaid by self-insurers. Self-insurance benefits wereimputed for the twenty-one states that were unableto provide data. The self-insurance imputation meth-ods are described in Appendix E.

Benefits under Deductible Policies

Forty-six jurisdictions allow carriers to writedeductible policies for workers compensation. OfThese jurisdictions, five were able to provide theamount of benefits paid under deductible policies.Benefits under deductible arrangements were esti-mated for another thirteen states by subtractingA.M. Best data on benefits paid (which do notinclude deductible benefits) from data reported bythe state agency (which, in these cases, includeddeductible benefits). Deductible benefits in theremaining states were estimated using a ratio ofManual Equivalent Premiums, as described inAppendix G.

Medical Benefits

The agency data for medical share were used in ninestates. The National Council on CompensationInsurance estimates of the medical share of the bene-fits were used in thirty-seven jurisdictions. Othermethods were used for five states for which no infor-mation was available from the state or NCCI. Moredetail on methods to estimate medical benefits is inAppendix F.

Employer Costs

NASI estimates of employer costs for benefits paidunder private insurance and state funds are the sumof “direct premiums written” as reported by A.M.Best and the NAIC, plus our estimate of benefitspaid under deductible arrangements (which are notreflected in premiums). In some cases, data providedby state agencies are used instead of A.M. Best data.State fund premium data for Minnesota, Montana,

Appendix C: Data Availability


North Dakota, and Washington were provided bythe state agencies.

For self-insured employers, the costs include benefitpayments and administrative costs. Because self-insured employers often do not separately recordadministrative costs for workers’ compensation, theiradministrative costs must be estimated. They areassumed to be the same share of benefits as adminis-trative costs for other insurers. This percentage isbased on the ratio of administrative costs to totalbenefits as reported by private insurers to theNational Association of Insurance Commissioners

(NAIC, 1998; 1999; 2000; 2001; 2002; 2003;2004; 2005). This ratio is based on direct loss adjust-ment expenses and their expense for taxes, licenses,and fees. The ratios were:1997: 15.7 percent1998: 14.5 percent1999: 15.8 percent2000: 14.0 percent2001: 14.6 percent2002: 14.8 percent2003: 17.1 percent2004: 16.19 percent


Table C1

Workers’ Compensation Data Provided by States for 2004a

Calendar Year Paid

State Private Carriers State Funds Self-Insureds Deductibles Medical

Alabama NA Note 1 Note 4Alaska NA Note 1 Note 4Arizona Note 2 Note 4Arkansas NA Note 2 Note 4California Note 1Colorado Note 7 Note 2 Note 4Connecticut NA Note 2 Note 4Delaware NA Note 8 Note 2 Note 5District of Columbia NA Note 3 Note 2 Note 4Florida Note 6 NA Note 2 Note 4Georgia NA Note 2 Note 2 Note 4Hawaii Note 1 Note 4Idaho Note 8 Note 2 Note 4Illinois NA Note 3 Note 2 Note 4Indiana NA Note 3 Note 2 Note 4Iowa NA Note 3 Note 2 Note 4Kansas Note 6 NA Note 2 Note 4Kentucky Note 6 Note 3 Note 2 Note 4Louisiana Note 2 Note 4Maine Note 2 Note 4Maryland Note 2 Note 4Massachusetts NA Note 2Michigan NA Note 1MinnesotaMississippi NA Note 2 Note 4Missouri Note 1 Note 4Montana Note 1 Note 4Nebraska Note 6 NA Note 3 Note 2 Note 4Nevada NA Note 1 Note 4New Hampshire NA Note 3 Note 2 Note 4New Jersey NA Note 8 Note 1 Note 5New Mexico Note 1 Note 4New York Note 3 Note 1North Carolina NA Note 3 Note 2 Note 4North Dakota NA NAOhio NA NAOklahoma Note 2 Note 4Oregon Note 4PennsylvaniaRhode Island Note 8 Note 2 Note 4South Carolina Note 4South Dakota NA Note 1 Note 4Tennessee NA Note 3 Note 2 Note 4Texas Note 3 Note 2 Note 4Utah Note 3 Note 2 Note 4Vermont NA Note 3 Note 2 Note 4Virginia NA Note 3 Note 1 Note 4Washington NA NAWest Virginia NA Note 7 Note 8 NA Note 5Wisconsin Note 6 NA Note 3 NA Note 5Wyoming NA NA NA Note 5

Shaded areas corespond with reported data

White areas correspond with data reported by A.M. Best

(a) Data was provided by state workers' compensation agen-cies, insurance rating boards, departments of labor, andindustrial commissions.

NA: Not applicable.

Note 1: Data were not directly available but could be com-puted by subtracting various components from total benefitfigures provided.

Note 2: Computed from information provided on premiums.

Note 3: Self-insured benefits as described in Appendix E.

Note 4: Medical data provided by NCCI .

Note 5: Medical data estimated based on data provided byNCCI.

Note 6: Data provided by agency either was not complete orprovided accident year data hence AM Best data were used.

Note 7: Data provided by National Association of InsuranceCommissioners (NAIC).

Note 8: Self-insured data was imputed using last years data.



In preparing the 2004 estimates for workers’ com-pensation benefits, the National Academy of SocialInsurance reviewed and revised all data for calendaryears 2000-2003. The revision process began byrequesting historical data from state workers’ com-pensation agencies and from AM Best. The revisedbenefit estimates are reported in the following tables.Revisions to the historical data increase consistencyin historical methodology and enhance comparabili-ty between years. The following are key revisionsmade to the historical data:

■ Revised data consistently use the same medicalbenefit estimation methodology described inAppendix F.

■ Revised data consistently use the samedeductible estimation methodology describedin Appendix G.

■ Self-insurance benefit imputations were revisedusing historical data as reported in Appendix E.

■ Changes in data reported by state agencies werecaptured by the revised data questionnaire andare reflected in the revised estimates.

■ Administrative costs for self-insurance were re-estimated based on updated information fromthe National Association of InsuranceCommissioners as described in Appendix C.

The revised data in this Appendix should be used inplace of previously published data. Historical datadisplayed in the body of this report incorporate theserevisions.

Appendix D: Revised Data for 2000–2003


Tab

le D

1

Wor

kers

’ Com

pens

atio

n B

enef

its

by T

ype

of I

nsur

eran

d M

edic

al B

enef

its,

by

Stat

e, 2

003

(in

thou

sand

s)

Priv

ate

Stat

eSe

lf-M

edic

alPe

rcen

tSt

ate

Tota

lC

arri

ersa

Fund

sIn

sure

dbB

enef

itsM

edic

al

Ala

bam

a$5

80,1

84$2

94,7

460

$285

,438

$364

,616

62.8

c

Ala

ska

184,

379

140,

585

043

,794

101,

417

55.0

c

Ari

zona

531,

240

173,

290

270,

071

87,8

7833

7,05

663

.4c

Ark

ansa

s22

5,06

115

8,05

70

67,0

0413

9,77

962

.1c

Cal

iforn

ia12

,403

,729

5,90

3,92

02,

917,

587

3,58

2,22

36,

329,

029

51.0

Col

orad

o75

7,04

125

0,27

635

7,84

814

8,91

733

2,71

343

.9c

Con

nect

icut

674,

747

458,

665

021

6,08

228

8,35

642

.7c

Del

awar

e16

0,26

411

5,44

20

44,8

2276

,703

47.9

d

Dist

rict

of C

olum

bia

89,1

0868

,263

020

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32,9

7337

.0c

Flor

ida

2,81

1,30

22,

274,

185

053

7,11

71,

631,

140

58.0

c

Geo

rgia

1,06

1,96

972

3,71

50

338,

254

502,

974

47.4

c

Haw

aii

274,

922

162,

168

24,6

5288

,102

105,

503

38.4

c

Idah

o19

6,39

467

,239

117,

483

11,6

7211

2,15

957

.1c

Illin

ois

2,10

3,65

81,

623,

893

047

9,76

597

5,42

846

.4c

Indi

ana

559,

421

472,

930

086

,491

378,

310

67.6

c

Iow

a42

4,19

833

5,33

00

88,8

6820

5,46

348

.4c

Kan

sas

293,

473

230,

247

063

,226

160,

283

54.6

c

Ken

tuck

y72

4,29

143

2,08

067

,050

225,

162

392,

111

54.1

c

Loui

sian

a58

5,48

029

2,15

614

7,55

814

5,76

629

7,35

750

.8c

Mai

ne23

9,77

796

,727

67,9

6175

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110,

790

46.2

c

Mar

ylan

d70

1,29

743

1,67

716

5,06

110

4,55

929

2,54

241

.7c

Mas

sach

uset

ts1,

057,

175

904,

215

015

2,96

035

0,93

133

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ichi

gan

1,47

6,85

087

7,00

70

599,

843

542,

574

36.7

Min

neso

ta88

5,00

654

9,18

411

3,62

922

2,19

341

3,72

646

.7M

issis

sippi

291,

014

165,

513

012

5,50

116

2,55

355

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Mis

sour

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080,

870

657,

912

124,

147

298,

811

534,

615

49.5

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Mon

tana

200,

857

74,0

0991

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34,9

1710

5,28

652

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Neb

rask

a29

0,41

921

2,48

50

77,9

3417

1,36

159

.0c

Nev

ada

326,

556

214,

946

011

1,61

015

0,15

146

.0c

New

Ham

pshi

re21

9,62

917

8,96

80

40,6

6112

3,98

156

.5c


New

Jer

sey

1,37

9,23

51,

261,

258

011

7,97

666

0,10

747

.9d

New

Mex

ico

189,

427

92,4

4828

,269

68,7

0910

7,93

657

.0c

New

Yor

k3,

220,

398

1,63

1,50

178

8,49

680

0,40

11,

039,

503

32.3

Nor

th C

arol

ina

1,06

6,61

181

4,29

10

252,

320

480,

925

45.1

c

Nor

th D

akot

aa78

,453

296

78,1

570

43,1

0254

.9O

hioa

2,44

2,18

723

,858

1,93

6,35

448

1,97

51,

140,

541

46.7

Okl

ahom

a55

3,92

225

6,38

718

0,58

611

6,94

926

2,95

347

.5c

Ore

gon

471,

307

220,

585

206,

878

43,8

4424

5,97

552

.2c

Penn

sylv

ania

2,56

5,34

41,

820,

527

180,

677

564,

140

1,04

0,16

940

.5R

hode

Isla

nd13

0,86

536

,667

79,1

0715

,090

40,5

7931

.0c

Sout

h C

arol

ina

656,

935

441,

662

52,0

8516

3,18

831

2,05

647

.5c

Sout

h D

akot

a73

,767

70,8

430

2,92

446

,331

62.8

cTe

nnes

see

842,

647

634,

071

020

8,57

644

5,70

352

.9c

Texa

s1,

856,

942

1,26

9,42

822

2,31

236

5,20

21,

169,

889

63.0

c

Uta

h18

6,34

450

,802

109,

462

26,0

8112

1,84

965

.4c

Ver

mon

t11

9,96

110

4,96

10

15,0

0058

,147

48.5

c

Vir

gini

a70

1,59

354

1,70

10

159,

892

393,

992

56.2

c

Was

hing

tona

1,80

0,07

626

,671

1,30

9,55

046

3,85

561

9,55

334

.4W

est V

irgi

niaa

828,

913

3,27

470

8,49

711

7,14

224

1,67

629

.2W

iscon

sin84

0,35

470

4,26

80

136,

086

402,

196

47.9

d

Wyo

min

ga11

4,25

22,

169

112,

083

072

,090

63.1

Non

-fed

eral

tot

al$5

1,52

9,84

5$2

8,54

7,49

8$1

0,45

7,49

1$1

2,52

4,85

6$2

4,66

7,15

147

.9Fe

dera

le3,

184,

685

842,

779

26.5

Fede

ral e

mpl

oyee

s2,

367,

757

669,

484

28.3

TO

TA

L54

,714

,530

25,5

09,9

3046

.6

8St

ates

with

exc

lusiv

e fu

nds

(Ohi

o, N

orth

Dak

ota,

Was

hing

ton,

Wes

t Vir

gini

a, a

nd W

yom

ing)

may

hav

e sm

all a

mou

nts

of b

enef

its p

aid

in t

he p

riva

te c

arri

er c

ateg

ory.

Thi

s re

sults

from

two

sour

ces:

com

pani

es w

ith g

roup

pol

icie

s th

at o

verla

p st

ates

and

the

fact

tha

t so

me

com

pani

es in

clud

e ex

cess

wor

kers

’ com

pens

atio

n co

vera

ge in

the

ir r

epor

ts o

f wor

kers

’ com

pens

a-tio

n be

nefit

s to

A.M

. Bes

t.(b

)Sel

f-in

sura

nce

incl

udes

indi

vidu

al s

elf-

insu

rers

and

gro

up s

elf-

insu

ranc

e.(c

)M

edic

al p

erce

ntag

es b

ased

on

data

pro

vide

d by

NC

CI,

see

App

endi

x F.

(d)M

edic

al p

erce

ntag

e ba

sed

on t

he w

eigh

ted

aver

age

of s

tate

s w

here

med

ical

dat

a w

ere

avai

labl

e.(e

)Fe

dera

l ben

efits

incl

ude:

tho

se p

aid

unde

r th

e Fe

dera

l Em

ploy

ees’

Com

pens

atio

n A

ct fo

r ci

vilia

n em

ploy

ees;

the

port

ion

of t

he B

lack

Lun

g be

nefit

pro

gram

tha

t is

finan

ced

by e

mpl

oy-

ers;

and

a po

rtio

n of

ben

efits

und

er t

he L

ongs

hore

and

Har

bor

Wor

kers

’ Com

pens

atio

n A

ct t

hat

are

not

refle

cted

in s

tate

dat

a, n

amel

y, b

enef

its p

aid

by s

elf-

insu

red

empl

oyer

s an

d by

spec

ial f

unds

und

er t

he L

HW

CA

. See

App

endi

x H

for

mor

e in

form

atio

n ab

out

fede

ral p

rogr

ams.

Sour

ce: N

atio

nal A

cade

my

of S

ocia

l Ins

uran

ce e

stim

ates

bas

ed o

n da

ta r

ecei

ved

from

sta

te a

genc

ies,

the

U.S

. Dep

artm

ent

of L

abor

, A.M

. Bes

t, an

d th

e N

atio

nal C

ounc

il on

Com

pens

atio

n In

sura

nce.


Tab

le D

2

Wor

kers

’ Com

pens

atio

n B

enef

its

by T

ype

of I

nsur

er a

nd M

edic

al B

enef

its,

by

Stat

e, 2

002

(in

thou

sand

s)

Priv

ate

Stat

eSe

lf-M

edic

alPe

rcen

tSt

ate

Tota

lC

arri

ersa

Fund

sIn

sure

dbB

enef

itsM

edic

al

Ala

bam

a$5

65,2

64

$290

,009

$0

$2

75,2

55

$343

,115

60

.7c

Ala

ska

180,

046

138,

454

0 41

,592

97

,225

54

.0c

Ari

zona

505,

278

195,

025

232,

168

78,0

85

303,

672

60.1

c

Ark

ansa

s22

1,47

4 16

0,19

7 0

61,2

77

138,

200

62.4

c

Cal

iforn

ia11

,582

,431

6,

065,

550

2,19

1,96

2 3,

324,

919

5,80

8,98

5 50

.2C

olor

ado

760,

958

299,

716

322,

249

138,

993

343,

192

45.1

c

Con

nect

icut

675,

895

467,

522

0 20

8,37

3 28

0,49

7 41

.5c

Del

awar

e15

2,93

3 10

3,56

6 0

49,3

67

72,0

86

47.1

d

Dist

rict

of C

olum

bia

93,9

60

71,9

05

0 22

,055

34

,013

36

.2c

Flor

ida

2,67

8,08

2 2,

208,

833

0 46

9,24

9 1,

523,

829

56.9

c

Geo

rgia

974,

661

661,

456

0 31

3,20

5 46

4,91

3 47

.7c

Haw

aii

267,

827

167,

539

17,9

08

82,3

80

99,6

32

37.2

c

Idah

o18

5,68

8 77

,068

97

,545

11

,075

10

5,28

5 56

.7c

Illin

ois

2,12

3,87

8 1,

656,

030

0 46

7,84

7 94

3,00

2 44

.4c

Indi

ana

547,

305

462,

687

0 84

,618

35

9,03

2 65

.6c

Iow

a40

0,22

6 32

5,00

6 0

75,2

20

202,

514

50.6

c

Kan

sas

341,

606

235,

253

0 10

6,35

3 18

5,15

1 54

.2c

Ken

tuck

y70

8,42

4 45

4,42

7 56

,283

19

7,71

4 38

1,84

0 53

.9c

Loui

sian

a56

2,81

2 26

5,18

7 15

3,76

9 14

3,85

7 29

6,60

2 52

.7c

Mai

ne26

1,73

4 99

,212

75

,470

87

,051

10

3,64

7 39

.6c

Mar

ylan

d66

4,28

2 40

0,91

4 14

8,65

7 11

4,71

1 26

8,37

0 40

.4c

Mas

sach

uset

ts90

2,84

0 76

2,32

4 0

140,

517

294,

359

32.6

Mic

higa

n1,

512,

457

846,

823

0 66

5,63

4 52

3,26

0 34

.6M

inne

sota

921,

518

611,

861

98,0

96

211,

561

438,

278

47.6

Mis

sissi

ppi

290,

378

172,

668

0 11

7,71

0 18

0,61

5 62

.2c

Mis

sour

i1,

115,

832

715,

537

112,

786

287,

509

554,

568

49.7

c

Mon

tana

177,

877

70,0

99

75,8

60

31,9

18

95,3

42

53.6

c

Neb

rask

a28

2,84

4 20

6,94

3 0

75,9

01

161,

504

57.1

c

Nev

ada

324,

597

210,

474

0 11

4,12

3 13

3,31

7 41

.1c

New

Ham

pshi

re21

1,73

4 17

5,18

8 0

36,5

45

117,

724

55.6

c


New

Jer

sey

1,32

8,65

0 1,

225,

172

0 10

3,47

7 62

6,26

8 47

.1d

New

Mex

ico

175,

845

89,2

58

24,9

48

61,6

38

99,8

80

56.8

c

New

Yor

k3,

142,

392

1,58

0,74

3 78

0,63

6 78

1,01

3 96

8,46

2 30

.8N

orth

Car

olin

a98

7,73

1 75

0,66

7 0

237,

064

423,

737

42.9

c

Nor

th D

akot

aa73

,515

22

0 73

,295

0

39,2

04

53.3

Ohi

oa2,

388,

186

37,6

52

1,87

8,25

7 47

2,27

7 1,

106,

572

46.3

Okl

ahom

a50

8,93

1 25

1,23

1 14

0,45

0 11

7,25

1 23

4,61

7 46

.1c

Ore

gon

474,

547

238,

333

192,

157

44,0

57

240,

121

50.6

c

Penn

sylv

ania

2,47

8,70

9 1,

761,

444

157,

299

559,

966

990,

861

40.0

Rho

de I

sland

141,

066

48,0

46

77,4

02

15,6

18

43,0

25

30.5

c

Sout

h C

arol

ina

592,

530

398,

098

43,7

70

150,

661

265,

453

44.8

c

Sout

h D

akot

a73

,382

69

,996

0

3,38

6 45

,130

61

.5c

Tenn

esse

e77

7,26

4 59

9,80

9 0

177,

455

398,

737

51.3

c

Texa

s2,

307,

054

1,68

0,24

0 24

6,26

5 38

0,55

0 1,

432,

681

62.1

c

Uta

h21

1,88

3 76

,492

10

5,72

1 29

,670

14

1,11

4 66

.6c

Ver

mon

t11

9,32

9 10

7,32

9 0

12,0

00

62,8

86

52.7

c

Vir

gini

a62

6,95

4 49

5,61

7 0

131,

337

339,

182

54.1

c

Was

hing

tona

1,71

6,10

7 28

,768

1,

225,

007

462,

332

590,

036

34.4

Wes

t Vir

gini

aa83

2,60

8 3,

588

697,

271

131,

749

246,

579

29.6

Wis

cons

in89

6,55

6 75

6,59

9 0

139,

957

422,

598

47.1

d

Wyo

min

ga10

7,47

5 5,

913

101,

562

0 68

,585

63

.8N

on-f

eder

al t

otal

$50,

155,

557

$28,

782,

692

$9,3

26,7

92$1

2,04

6,07

3$2

3,63

9,49

847

.1Fe

dera

le3,

153,

626

840,

445

26.7

Fede

ral E

mpl

oyee

s2,

317,

325

665,

378

28.7

TO

TA

L53

,309

,183

24,4

79,9

4345

.9

(a)

Stat

es w

ith e

xclu

sive

fund

s (O

hio,

Nor

th D

akot

a, W

ashi

ngto

n, W

est V

irgi

nia,

and

Wyo

min

g) m

ay h

ave

smal

l am

ount

s of

ben

efits

pai

d in

the

pri

vate

car

rier

cat

egor

y. T

his

resu

lts fr

omtw

o so

urce

s: co

mpa

nies

with

gro

up p

olic

ies

that

ove

rlap

stat

es a

nd t

he fa

ct t

hat

som

e co

mpa

nies

incl

ude

exce

ss w

orke

rs’ c

ompe

nsat

ion

cove

rage

in t

heir

rep

orts

of w

orke

rs’ c

ompe

nsa-

tion

bene

fits

to A

.M. B

est.

(b)S

elf-

insu

ranc

e in

clud

es in

divi

dual

sel

f-in

sure

rs a

nd g

roup

sel

f-in

sura

nce.

(c)

Med

ical

per

cent

ages

bas

ed o

n da

ta p

rovi

ded

by N

CC

I, s

ee A

ppen

dix

F.(d

)Med

ical

per

cent

age

base

d on

the

wei

ghte

d av

erag

e of

sta

tes

whe

re m

edic

al d

ata

wer

e av

aila

ble.

(e)

Fede

ral b

enef

its in

clud

e: t

hose

pai

d un

der

the

Fede

ral E

mpl

oyee

s’ C

ompe

nsat

ion

Act

for

civi

lian

empl

oyee

s; th

e po

rtio

n of

the

Bla

ck L

ung

bene

fit p

rogr

am t

hat

is fi

nanc

ed b

y em

ploy

-er

s; an

d a

port

ion

of b

enef

its u

nder

the

Lon

gsho

re a

nd H

arbo

r W

orke

rs’ C

ompe

nsat

ion

Act

tha

t ar

e no

t re

flect

ed in

sta

te d

ata,

nam

ely,

ben

efits

pai

d by

sel

f-in

sure

d em

ploy

ers

and

bysp

ecia

l fun

ds u

nder

the

LH

WC

A. S

ee A

ppen

dix

H fo

r m

ore

info

rmat

ion

abou

t fe

dera

l pro

gram

s.

Sour

ce: N

atio

nal A

cade

my

of S

ocia

l Ins

uran

ce e

stim

ates

bas

ed o

n da

ta r

ecei

ved

from

sta

te a

genc

ies,

the

U.S

. Dep

artm

ent

of L

abor

, A.M

. Bes

t, an

d th

e N

atio

nal C

ounc

il on

Com

pens

atio

n In

sura

nce.


Tab

le D

3

Wor

kers

’ Com

pens

atio

n B

enef

its

by T

ype

of I

nsur

er a

nd M

edic

al B

enef

its,

by

Stat

e, 2

001

(in

thou

sand

s)

Priv

ate

Stat

eSe

lf-M

edic

alPe

rcen

tSt

ate

Tota

lC

arri

ersa

Fund

sIn

sure

dbB

enef

itsM

edic

al

Ala

bam

a$5

62,7

73$

304,

347

$ $2

58,4

25$

342,

729

60.9

c

Ala

ska

163,

111

125,

678

037

,434

86,1

2352

.8c

Ari

zona

436,

037

206,

979

148,

810

80,2

4826

7,72

661

.4c

Ark

ansa

s21

7,71

915

2,33

10

65,3

8813

3,24

461

.2c

Cal

iforn

ia10

,082

,580

5,57

3,93

01,

544,

302

2,96

4,34

84,

690,

006

46.5

Col

orad

o56

6,35

430

7,51

611

7,80

914

1,02

924

6,93

043

.6c

Con

nect

icut

641,

341

450,

892

019

0,44

926

8,08

041

.8c

Del

awar

e13

8,37

193

,723

044

,647

64,3

3446

.5d

Dist

rict

of C

olum

bia

91,1

4874

,570

016

,578

36,1

8639

.7c

Flor

ida

3,03

3,95

52,

441,

956

059

1,99

91,

720,

253

56.7

c

Geo

rgia

1,02

9,37

471

5,16

40

314,

209

497,

188

48.3

c

Haw

aii

248,

100

163,

287

9,18

275

,631

97,2

5539

.2c

Idah

o17

9,64

082

,400

87,8

299,

411

100,

957

56.2

c

Illin

ois

2,07

9,76

81,

583,

265

049

6,50

393

3,81

644

.9c

Indi

ana

524,

111

443,

079

081

,032

342,

768

65.4

c

Iow

a39

0,23

531

8,27

10

71,9

6518

0,28

946

.2c

Kan

sas

340,

483

240,

527

099

,956

194,

416

57.1

c

Ken

tuck

y67

1,87

543

1,88

443

,755

196,

237

372,

891

55.5

c

Loui

sian

a58

7,85

531

0,40

713

2,80

414

4,64

331

0,97

552

.9c

Mai

ne24

5,14

597

,219

60,9

2687

,000

109,

825

44.8

c

Mar

ylan

d68

1,63

340

8,59

315

7,70

911

5,33

128

8,33

142

.3c

Mas

sach

uset

ts88

1,41

774

6,40

90

135,

008

286,

093

32.5

Mic

higa

n1,

477,

986

809,

463

066

8,52

348

2,60

232

.7M

inne

sota

904,

451

610,

309

91,6

2220

2,52

043

0,61

047

.6M

issis

sipp

i28

4,72

918

3,23

80

101,

491

156,

031

54.8

c

Mis

sour

i95

8,70

860

9,40

091

,486

257,

822

508,

256

53.0

c

Mon

tana

179,

613

79,4

4670

,987

29,1

8095

,195

53.0

c

Neb

rask

a24

7,61

618

3,66

80

63,9

4814

1,88

457

.3c

Nev

ada

309,

321

210,

299

099

,022

126,

504

40.9

c

New

Ham

pshi

re21

5,15

816

7,09

60

48,0

6212

2,21

056

.8c


New

Jer

sey

1,25

5,97

41,

135,

842

012

0,13

258

3,94

946

.5d

New

Mex

ico

159,

050

81,8

8421

,218

55,9

4893

,204

58.6

c

New

Yor

k2,

978,

224

1,44

0,90

479

7,10

974

0,21

191

3,24

430

.7N

orth

Car

olin

a90

5,25

370

5,18

80

200,

065

405,

553

44.8

c

Nor

th D

akot

aa71

,267

468

70,7

990

38,1

3853

.5O

hioa

2,24

8,36

933

,376

1,76

2,62

245

2,37

199

9,43

544

.5O

klah

oma

526,

070

292,

480

120,

815

112,

775

250,

935

47.7

c

Ore

gon

472,

691

253,

207

179,

395

40,0

8922

5,94

647

.8c

Penn

sylv

ania

2,40

6,27

21,

700,

651

144,

523

561,

097

943,

970

39.2

Rho

de I

sland

135,

703

53,6

3664

,273

17,7

9441

,525

30.6

c

Sout

h C

arol

ina

532,

374

367,

262

39,4

4412

5,66

824

3,82

745

.8c

Sout

h D

akot

a70

,660

68,2

100

2,45

043

,173

61.1

c

Tenn

esse

e84

3,06

264

5,67

60

197,

386

435,

863

51.7

c

Texa

s2,

212,

275

1,62

3,70

224

6,19

234

2,38

11,

334,

002

60.3

c

Uta

h19

7,60

673

,614

87,5

2236

,470

131,

606

66.6

c

Ver

mon

t97

,654

81,2

460

16,4

0944

,042

45.1

c

Vir

gini

a60

4,38

346

8,58

80

135,

794

340,

872

56.4

c

Was

hing

tona

1,63

8,99

727

,538

1,18

7,23

542

4,22

456

4,06

134

.4W

est V

irgi

niaa

713,

130

633

615,

581

96,9

1619

2,55

827

.0W

isco

nsin

923,

761

787,

332

013

6,42

953

6,70

558

.1c

Wyo

min

ga10

0,07

63,

017

97,0

590

67,5

6767

.5d

Non

-fed

eral

tot

al$

47,4

63,4

57$

27,9

69,8

02$

7,99

1,00

8$

11,5

02,6

48$

22,0

63,8

8246

.5Fe

dera

le3,

069,

267

780,

176

25.4

Fede

ral e

mpl

oyee

s2,

223,

088

623,

057

28.0

TO

TA

L50

,532

,724

22,8

44,0

5845

.2

(a)

Stat

es w

ith e

xclu

sive

fund

s (O

hio,

Nor

th D

akot

a, W

ashi

ngto

n, W

est V

irgi

nia,

and

Wyo

min

g) m

ay h

ave

smal

l am

ount

s of

ben

efits

pai

d in

the

pri

vate

car

rier

cat

egor

y. T

his

resu

lts fr

omtw

o so

urce

s: co

mpa

nies

with

gro

up p

olic

ies

that

ove

rlap

stat

es a

nd t

he fa

ct t

hat

som

e co

mpa

nies

incl

ude

exce

ss w

orke

rs’ c

ompe

nsat

ion

cove

rage

in t

heir

rep

orts

of w

orke

rs’ c

ompe

nsa-

tion

bene

fits

to A

.M. B

est.

(b)S

elf-

insu

ranc

e in

clud

es in

divi

dual

sel

f-in

sure

rs a

nd g

roup

sel

f-in

sura

nce.

(c)

Med

ical

per

cent

ages

bas

ed o

n da

ta p

rovi

ded

by N

CC

I, s

ee A

ppen

dix

F.(d

)Med

ical

per

cent

age

base

d on

the

wei

ghte

d av

erag

e of

sta

tes

whe

re m

edic

al d

ata

wer

e av

aila

ble.

(e)

Fede

ral b

enef

its in

clud

e: t

hose

pai

d un

der

the

Fede

ral E

mpl

oyee

s’ C

ompe

nsat

ion

Act

for

civi

lian

empl

oyee

s; th

e po

rtio

n of

the

Bla

ck L

ung

bene

fit p

rogr

am t

hat

is fi

nanc

ed b

y em

ploy

-er

s; an

d a

port

ion

of b

enef

its u

nder

the

Lon

gsho

re a

nd H

arbo

r W

orke

rs’ C

ompe

nsat

ion

Act

tha

t ar

e no

t re

flect

ed in

sta

te d

ata,

nam

ely,

ben

efits

pai

d by

sel

f-in

sure

d em

ploy

ers

and

bysp

ecia

l fun

ds u

nder

the

LH

WC

A. S

ee A

ppen

dix

H fo

r m

ore

info

rmat

ion

abou

t fe

dera

l pro

gram

s.

Sour

ce: N

atio

nal A

cade

my

of S

ocia

l Ins

uran

ce e

stim

ates

bas

ed o

n da

ta r

ecei

ved

from

sta

te a

genc

ies,

the

U.S

. Dep

artm

ent

of L

abor

, A.M

. Bes

t, an

d th

e N

atio

nal C

ounc

il on

Com

pens

atio

n In

sura

nce.


Tab

le D

4

Wor

kers

’ Com

pens

atio

n B

enef

its

by T

ype

of I

nsur

er a

nd M

edic

al B

enef

its,

by

Stat

e, 2

000

(in

thou

sand

s)

Priv

ate

Stat

eSe

lf-M

edic

alPe

rcen

tSt

ate

Tota

lC

arri

ersa

Fund

sIn

sure

dbB

enef

itsM

edic

al

Ala

bam

a$5

29,1

89$3

04,9

64$0

$224

,225

$315

,040

59.5

c

Ala

ska

139,

378

109,

467

029

,911

74,5

3153

.5c

Ari

zona

497,

955

230,

991

196,

364

70,5

9930

1,02

860

.5c

Ark

ansa

s21

3,96

916

2,14

70

51,8

2212

7,71

159

.7c

Cal

iforn

ia9,

449,

145

5,61

5,73

61,

173,

754

2,65

9,65

54,

306,

573

45.6

Col

orad

o81

0,30

133

9,52

126

4,63

620

6,14

435

6,63

444

.0c

Con

nect

icut

638,

435

452,

501

018

5,93

424

7,24

038

.7c

Del

awar

e13

7,73

788

,253

049

,483

62,3

0445

.2d

Dist

rict

of C

olum

bia

85,9

0963

,485

022

,424

43,9

9851

.2c

Flor

ida

2,57

6,87

52,

350,

035

022

6,84

01,

395,

609

54.2

c

Geo

rgia

964,

995

665,

212

029

9,78

244

6,48

146

.3c

Haw

aii

231,

359

153,

977

9,70

667

,676

89,3

4938

.6c

Idah

o11

3,59

850

,841

53,5

629,

195

63,7

8356

.1c

Illin

ois

1,94

8,33

01,

487,

042

046

1,28

885

8,97

344

.1c

Indi

ana

528,

901

447,

129

081

,772

343,

603

65.0

c

Iow

a34

2,93

028

0,79

10

62,1

4016

9,16

949

.3c

Kan

sas

322,

707

225,

234

097

,473

193,

093

59.8

c

Ken

tuck

y57

5,29

239

7,03

029

,797

148,

465

309,

219

53.7

c

Loui

sian

a54

6,54

428

3,91

311

7,00

114

5,63

127

2,72

849

.9c

Mai

ne24

4,71

410

5,09

950

,024

89,5

9110

4,86

442

.9c

Mar

ylan

d64

1,04

438

6,99

613

5,29

411

8,75

424

9,52

738

.9c

Mas

sach

uset

ts80

0,83

767

7,12

20

123,

716

246,

854

30.8

Mic

higa

n1,

474,

058

796,

329

067

7,72

947

2,35

532

.0M

inne

sota

797,

787

529,

436

88,0

7018

0,28

136

9,40

846

.3M

issis

sipp

i29

2,67

720

1,53

00

91,1

4816

3,79

056

.0c

Mis

sour

i77

9,78

650

7,71

360

,290

211,

782

376,

084

48.2

c

Mon

tana

154,

797

63,4

3766

,736

24,6

2481

,160

52.4

c

Neb

rask

a22

9,64

418

0,83

80

48,8

0612

6,34

055

.0c

Nev

ada

323,

567

219,

985

010

3,58

215

1,23

246

.7c

New

Ham

pshi

re17

8,52

214

1,19

70

37,3

2580

,753

45.2

d


New

Jer

sey

1,18

2,64

41,

087,

702

094

,941

534,

961

45.2

d

New

Mex

ico

143,

592

74,7

5213

,865

54,9

7477

,197

53.8

c

New

Yor

k2,

909,

115

1,34

6,94

583

9,13

672

3,03

486

9,84

329

.9N

orth

Car

olin

a87

2,66

966

0,38

90

212,

280

387,

672

44.4

c

Nor

th D

akot

aa69

,966

432

69,5

340

37,8

6654

.1O

hioa

2,09

8,54

528

,216

1,63

0,45

343

9,87

687

1,62

341

.5O

klah

oma

485,

371

282,

357

110,

131

92,8

8222

3,42

146

.0c

Ore

gon

425,

460

235,

228

158,

660

31,5

7220

7,92

148

.9c

Penn

sylv

ania

2,37

8,82

81,

660,

330

154,

580

563,

919

906,

449

38.1

Rho

de I

sland

126,

721

56,5

7351

,451

18,6

9839

,040

30.8

c

Sout

h C

arol

ina

515,

381

355,

648

37,0

0412

2,73

023

1,26

744

.9c

Sout

h D

akot

a63

,165

60,9

680

2,19

737

,291

59.0

c

Tenn

esse

e78

0,53

461

2,99

20

167,

542

399,

744

51.2

c

Texa

s2,

160,

372

1,58

4,36

521

8,58

935

7,41

81,

292,

666

59.8

c

Uta

h17

2,87

066

,557

80,5

9625

,717

115,

513

66.8

c

Ver

mon

t10

1,98

586

,984

015

,001

48,8

6947

.9c

Vir

gini

a60

2,03

546

7,16

30

134,

872

315,

522

52.4

c

Was

hing

tona

1,52

6,51

420

,742

1,13

5,12

037

0,65

253

3,62

835

.0W

est V

irgi

niaa

693,

057

2,67

958

9,26

010

1,11

718

7,57

527

.1W

isco

nsin

768,

282

656,

232

011

2,05

045

3,27

559

.0W

yom

inga

89,0

4193

388

,108

058

,803

66.0

Non

-fed

eral

tot

al$4

4,73

7,13

0$2

6,86

6,14

0$7

,421

,719

$10,

449,

272

$20,

229,

579

45.2

Fede

rale

2,95

7,40

469

7,82

523

.6Fe

dera

l em

ploy

ees

2,11

8,85

954

2,50

525

.6To

tal

47,6

94,5

3420

,927

,404

43.9

(a)

Stat

es w

ith e

xclu

sive

fund

s (O

hio,

Nor

th D

akot

a, W

ashi

ngto

n, W

est V

irgi

nia,

and

Wyo

min

g) m

ay h

ave

smal

l am

ount

s of

ben

efits

pai

d in

the

pri

vate

car

rier

cat

egor

y. T

his

resu

lts fr

omtw

o so

urce

s: co

mpa

nies

with

gro

up p

olic

ies

that

ove

rlap

stat

es a

nd t

he fa

ct t

hat

som

e co

mpa

nies

incl

ude

exce

ss w

orke

rs’ c

ompe

nsat

ion

cove

rage

in t

heir

rep

orts

of w

orke

rs’ c

ompe

nsa-

tion

bene

fits

to A

.M. B

est.

(b)S

elf-

insu

ranc

e in

clud

es in

divi

dual

sel

f-in

sure

rs a

nd g

roup

sel

f-in

sura

nce.

(c)

Med

ical

per

cent

ages

bas

ed o

n da

ta p

rovi

ded

by N

CC

I, s

ee A

ppen

dix

F.(d

)Med

ical

per

cent

age

base

d on

the

wei

ghte

d av

erag

e of

sta

tes

whe

re m

edic

al d

ata

wer

e av

aila

ble.

(e)

Fede

ral b

enef

its in

clud

e: t

hose

pai

d un

der

the

Fede

ral E

mpl

oyee

s’ C

ompe

nsat

ion

Act

for

civi

lian

empl

oyee

s; th

e po

rtio

n of

the

Bla

ck L

ung

bene

fit p

rogr

am t

hat

is fi

nanc

ed b

y em

ploy

-er

s; an

d a

port

ion

of b

enef

its u

nder

the

Lon

gsho

re a

nd H

arbo

r W

orke

rs’ C

ompe

nsat

ion

Act

tha

t ar

e no

t re

flect

ed in

sta

te d

ata,

nam

ely,

ben

efits

pai

d by

sel

f-in

sure

d em

ploy

ers

and

bysp

ecia

l fun

ds u

nder

the

LH

WC

A. S

ee A

ppen

dix

H fo

r m

ore

info

rmat

ion

abou

t fe

dera

l pro

gram

s.

Sour

ce: N

atio

nal A

cade

my

of S

ocia

l Ins

uran

ce e

stim

ates

bas

ed o

n da

ta r

ecei

ved

from

sta

te a

genc

ies,

the

U.S

. Dep

artm

ent

of L

abor

, A.M

. Bes

t, an

d th

e N

atio

nal C

ounc

il on

Com

pens

atio

n In

sura

nce.


This report uses a methodology that incorporateshistorical data to estimate self-insurance benefits instates that were not able to provide recent informa-tion. That methodology is as follows:

1) Collect total payroll of workers insured by pri-vate carriers and competitive state funds for cal-endar years 2000-2004. This information isavailable for 37 states from the NCCI.

2) For theses 37 states, use NASI estimate of totalcovered payroll for calendar years 2000-2004.This procedure is outlined in Appendix A.

3) Use (1) and (2) to estimate the percent of pay-roll covered by self-insurers for all states wherethese data are available. The percentage of pay-roll covered by self-insurers is [(2)-(1)]/(2).

4) Estimate the percent of total benefits paid byself-insurers in these 37 states by dividing self-insurance benefits by total benefits.

5) Determine the ratio of the percent of total ben-efits paid by self-insurers (4) to the percent ofpayroll covered by self-insurers (3) in each ofthese states. This ratio is (4)/(3).

6) Estimate the average ratio of the percent oftotal benefits paid by self-insurers (4) to thepercent of payroll covered by self-insurers (3)for these states.

7) Apply this ratio to the percent of payroll cov-ered by self-insurers in states where self-insur-ance benefits need to be estimated, to obtainan estimate of self-insurance benefits in thesestates [(6)*(3) = (4)].

Appendix E: Self-Insurer Benefits Estimates

Table E1

Self-Insurer Estimation Results,1997–2004

(6) Average Ratio of the percent of totalbenefits paid by self-insurers to the percentof payroll covered by self-insurers, (4)/(3)

Year Ratio

1997 54.21998 49.01999 51.22000 49.92001 54.12002 62.42003 63.12004 73.5


Estimates by the National Academy of SocialInsurance (NASI) of the percent of total benefitspaid that were for medical care are based on reportsfrom state agencies and from estimates provided bythe National Council on Compensation Insurance(NCCI).

For 2004, we used the NCCI data for the medicalshare for thirty-seven states.

The National Council on Compensation Insurance(NCCI) is a national organization that assists privatecarriers and insurance commissioners in settingworkers’ compensation rates in selected states. NCCIprovided NASI estimates of the percent of private

carrier benefits paid that were for medical care inthirty-seven states. For nine states we used theagency information on medical share given to NASIby the state agencies. For 2004, we used these per-centages to estimate the share of total benefits(including self-insured benefits) that were for med-ical care in five jurisdictions for which state reportsof medical benefits were not available.

For five states, Delaware, New Jersey, West Virginia,Wisconsin and Wyoming neither state reports norNCCI estimates of medical benefits were available.For these states, the weighted average of the share oftotal benefits that were for medical care in the otherforty-six jurisdictions was used.

Appendix F: Medical Benefit Estimates

64 NATIONAL ACADEMY OF SOCIAL INSURANCE64 NATIONAL ACADEMY OF SOCIAL INSURANCE

NASI has six methods for estimating deductible ben-efits and total benefits, depending on what is report-ed by the state.

Method A:

State reports deductible amounts.

Method: Use deductible amount reported by state. Five States: Minnesota, North Dakota, Oregon,Pennsylvania, and South Carolina.

Method B:

States say deductibles are included in their totals, butdo not report amounts of deductibles.Method: Estimate deductibles by subtracting NetLosses Paid as reported by A.M. Best from statereport.

Thirteen States: Alabama, Alaska, California,Hawaii, Michigan, Missouri, Montana, Nevada,New Jersey, New Mexico, New York, South Dakotaand Virginia.

Note: Before using A.M. Best data, state fund andprivate carrier data are separated out from both datareported by A.M. Best and state agencies (where nec-essary, i.e., where A.M. Best or the state agency clas-sify as private carrier an entity that we classify as astate fund).

Method C:

State reports benefit amounts and report their totalsdo not include deductibles, which are allowed in thestate. State does not report deductible amounts.

Method: Estimate deductible amount, using a ratioof Manual Equivalent Premiums. Add the estimateto the state reported amount to estimate the totalstate private carrier benefits.

Two States: Arkansas and Maine.

Method D:

Deductibles are not allowed in the state.

Method: Use state reports as totals. Deductiblesequal zero.

Five States: Ohio, Washington, West Virginia,Wisconsin, and Wyoming.

Method E:

State does not report benefit amounts. Deductiblesare allowed.

Method: Use Net Losses Paid as reported by A.M.Best and add estimated deductibles, based on theratio of Manual Equivalent Premiums.

Twenty-six Jurisdictions: Arizona, Colorado,Connecticut, Delaware, the District of Columbia,Florida, Georgia, Idaho, Illinois, Indiana, Iowa,Kansas, Kentucky, Louisiana, Maryland,Massachusetts, Mississippi, Nebraska, NewHampshire, North Carolina, Oklahoma,Rhode Island, Tennessee, Texas, Utah and Vermont.

Appendix G: Deductible Benefit Estimates


Various federal programs compensate certain cate-gories of workers for disabilities caused on the joband provide benefits to dependents of workers whodie of work-related causes. Each program isdescribed briefly below along with an explanation ofwhether and how it is included in our national totalsof workers’ compensation benefits. Our aim in thisreport is to include in national totals for workers’compensation those federally administered programsthat are financed by employers and that are not oth-erwise included in workers’ compensation benefitsreported by states, such as the benefits paid underthe Federal Employees’ Compensation Act. Programsthat cover private sector workers and are financed byfederal general revenues, such as the RadiationExposure Compensation Act, are not included in ournational totals for workers’ compensation benefitsand employer costs. More detail on these programs isin given below.

Federal Employees. The Federal Employees’Compensation Act of 1916, which superseded previ-ous workers’ compensation laws for federal employ-ees, provided the first comprehensive workers’ com-pensation program for federal civilian employees. In2004, total benefits were $2,445 million, of which29 percent were for medical care. The share of bene-fits for medical care is lower than in most state pro-grams because federal cash benefits, particularly forhigher-wage workers, replace a larger share of pre-injury wages than is the case in most state programs.Administrative costs of the program were $132 mil-lion in calendar year 2004, or 5.4 percent of totalbenefits (U.S. DOL, 2006a). Table H-1 reports ben-efits and administrative costs for federal civilianemployees under the Federal Employees’ Compensa-tion Act in 1997 through 2004. These benefits toworkers and costs to the federal government asemployer are included in national totals in thisreport, and are classified with federal programs.

Longshore and Harbor Workers. The Longshoreand Harbor Workers’ Compensation Act (LHWCA)requires employers to provide workers’ compensationprotection for longshore, harbor, and other maritimeworkers. The original program, enacted in 1927,covered maritime employees injured while workingover navigable waters because the Supreme Courtheld that the Constitution prohibits states fromextending coverage to such individuals. The program

also covers other workers who fall outside the juris-diction of state programs, such as employees on over-seas military bases, those working overseas for privatecontractors of the United States, and private employ-ees engaged in offshore drilling enterprises.

Private employers cover longshore and harbor work-ers by purchasing private insurance or self-insuring.In fiscal year 2004, about 300 self-insured employersand 250 insurance companies reported a total of22,646 lost-time injuries to the federal Office ofWorkers’ Compensation Programs. Total benefitspaid under the Act in 2004 were $747 million,which included $279 million paid by private insur-ance carriers, $322 million paid by self-insuredemployers, $135 million paid from the federallyadministered special fund for second injuries andother purposes, and $11 million for the District ofColumbia Workers’ Compensation Act (DCCA)Fund. Federal direct administrative costs were $12.6million or about 1.7 percent of benefits paid (TableH2). The Academy’s data series on benefits and costsof workers’ compensation includes at least part of thebenefits paid by private carriers under the LHWCAin the states where the companies operate. The bene-fits are not identified separately in the informationprovided by A.M. Best and state agencies. Benefitspaid by private employers who self-insure under theLongshore and Harbor Workers’ Compensation Actare not reported by states or A.M. Best. Conse-quently, these benefits and employer costs are includ-ed with federal programs in this report.

Table H-2 shows benefits reported to the U.S.Department of Labor by insurers and self-insuredemployers under the Longshore and HarborWorkers’ Compensation Act in 1997 through 2004.Ideally, benefits and employer costs under theLHWCA would be counted in the states where theemployee is located, because our estimates of coveredemployment and covered workers count these work-ers and wages in the states where they work. Webelieve that at least part of LHWCA benefits paidthrough private insurance carriers are included instate data that are reported to us by A.M. Best or thestates. At the same time, self-insured employersunder the LHWCA are not included in A.M. Bestdata and are unlikely to be included in state reports;benefits paid from the LHWCA special funds arenot included in state data. Thus, for 1997–2004

Appendix H: Federal Programs

66 NATIONAL ACADEMY OF SOCIAL INSURANCE66 NATIONAL ACADEMY OF SOCIAL INSURANCE66 NATIONAL ACADEMY OF SOCIAL INSURANCE

Table H1

Federal Employees’ Compensation Act, Benefits and Costs, 1997–2004 (in thousands)

1997 1998 1999 2000 2001 2002 2003 2004

Total Benefits $1,900,779 $2,009,862 $1,999,915 $2,118,859 $2,223,088 $2,317,325 $2,367,757 $2,445,077

Compensation Benefits 1,440,867 1,536,430 1,474,168 1,576,354 1,600,031 1,651,947 1,698,273 1,743,967

Medical Benefits 459,912 473,432 525,747 542,505 623,057 665,378 669,484 701,110

% Medical 24 24 26 26 28 29 28 29

Direct Administrative Costs 80,893 80,235 87,425 91,532 109,326 115,226 130,672 131,920

Total Costs 1,981,672 2,090,097 2,087,340 2,210,391 2,332,414 2,432,551 2,498,429 2,576,997

Indirect Administrative Costsa 6,835 5,750 5,584 6,197 5,056 4,596 4,806 4,587

(a) Includes legal and investigative support from the Office of the Solicitor and the Office of the Inspector General. Funded by GeneralRevenues.

Source: U.S. DOL 2006b.

Table H2

Longshore and Harbor Workers’ Compensation Act, Benefits and Costs, 1997–2004(in thousands)

1997 1998 1999 2000 2001 2002 2003 2004

Total Benefits $617,927 $642,321 $659,800 $671,991 $689,149 $700,563 $716,218 $747,358

Insurance Carriers 219,352 238,464 232,778 249,671 236,726 246,603 262,753 278,887

Self-Insured Employers 263,255 261,559 283,991 278,952 307,708 310,940 309,843 322,520

LHWCA Special Fund 123,772 129,777 131,152 131,564 133,374 131,684 132,504 135,073

DCCA Special Fund 11,548 12,521 11,879 11,804 11,341 11,336 11,118 10,878

Total Annual Assessments 121,300 122,000 141,300 145,700 145,000 136,000 135,800 148,500

LHWCA 110,000 111,000 130,000 133,000 133,000 125,000 125,000 137,000

DCCA 11,300 11,000 11,300 12,700 12,000 11,000 10,800 11,500

Administrative Expenses1 9,356 9,821 10,822 11,144 11,713 11,970 12,314 12,611

General Revenue 8,378 8,596 8,947 9,373 9,807 9,988 10,297 10,495

Trust Fund 978 1,225 1,875 1,771 1,906 1,982 2,017 2,116

Indirect Administrative Costs2 1,799 2,107 2,247 1,787 2,207 2,514 2,347 2,396

1 Longshore program administrative funding is divided between two sources. Industry oversight and claims activities are funded fromgeneral tax revenues. The program also exercises fiduciary responsibility for a Special Fund, which draws its revenue primarily fromannual industry assessments based on anticipated benefit liabilities. This Fund makes direct benefits payments for certain categories ofclaims and provides funding for the program’s rehabilitation staff and Special Fund oversight activities.

2 Includes legal and investigative support from the Office of the Solicitor and the Office of the Inspector General. Funded by GeneralRevenues.


data, our estimates of total federal benefits includebenefits paid by self-insured employers and the spe-cial funds under the LHWCA. Without other infor-mation, we assume that privately insured benefitsunder the program are included in state reports.Whether and how LHWCA benefits can be reflectedin state reports is a subject for analysis.

Coal Miners with Black Lung Disease. The BlackLung Benefits Act, enacted in 1969, provides com-pensation for coal miners with pneumoconiosis, orblack lung disease, and their survivors. The programhas two parts. Part B is financed by federal generalrevenues, and was administered by the SocialSecurity Administration until 1997 when adminis-tration shifted to the U.S. Department of Labor. PartC is paid through the Black Lung Disability TrustFund, which is financed by coal-mine operatorsthrough a federal excise tax on coal that is minedand sold in the United States. In this report, only thePart C benefits that are financed by employers areincluded in national totals of workers’ compensationbenefits and employer costs in 1997–2004. Totalbenefits in 2004 were $714 million, of which $371million was paid under Part B and $343 million waspaid under Part C. Part C benefits include $53 mil-lion for medical care.

Medical benefits are available only to Part C benefi-ciaries and only for diagnosis and treatment of blacklung disease. Medical benefits are a small share ofblack lung benefits because many of the recipients ofbenefits are deceased coal miners’ dependents, whosemedical care is not covered by the program. Federaldirect administrative costs were $38.1 million orabout 5.3 percent of benefit payments.

Table H-3 shows benefits under the Black LungBenefit program in 1997 through 2004 for bothparts of the program. Its benefits are paid directly bythe responsible mine operator or insurer or from thefederal Black Lung Disability Trust Fund. No dataare available on the experience of employers whoself-insure under the Black Lung program. Any suchbenefits and costs are not reflected in Table H-3 andare not included in national estimates.

Energy Employees. The Energy EmployeesOccupational Illness Compensation Program pro-vides lump-sum payments up to $150,000 to civilianworkers (and/or their survivors) who became ill as aresult of exposure to radiation, beryllium, or silica in

the production or testing of nuclear weapons. This isPart B of the program, which went into effect in July2001. It provides smaller lump-sum payments toindividuals found eligible for an award under theRadiation Exposure Compensation Act. Medicalbenefits are awarded for the treatment of coveredconditions. Total benefits in 2004 were $276 mil-lion, of which $250 million were paid as compensa-tion benefits (U.S. DOL, 2006b). These general rev-enue financed benefits are not included in ournational totals. Table H-4 provides information onPart B of the Energy Employees Occupational IllnessCompensation Program Act of 2000.

Workers Exposed to Radiation. The RadiationExposure Compensation Act of 1990 provides lump-sum compensation payments to individuals whocontracted certain cancers and other serious diseasesas a result of exposure to radiation released duringabove ground nuclear weapons tests or duringemployment in underground uranium mines. Thelump-sum payments are specified in law and rangefrom $50,000 to $100,000. From the beginning ofthe program through March 2006, 15,127 claimswere paid for a total of $1,003 million, or roughly$66,314 a claim (U.S. DOJ, 2006). The program isfinanced with federal general revenues and is notincluded in national totals in this report. Table H-5shows cumulative payments under the RadiationExposure Compensation Act since its enactment in1990.

Veterans of Military Service. U.S. military person-nel are covered by the federal veterans’ compensationprogram of the Department of Veterans Affairs,which provides cash benefits to veterans who sus-tained total or partial disabilities while on activeduty. In September 2005, 2.6 million veterans werereceiving monthly compensation payments for ser-vice- connected disabilities. Of these, 45 percent ofthe veterans had a disability rating of 30 percent orless, while the others had higher-rated disabilities.Total monthly payments for the disabled veteransand their dependents were $1.9 billion as ofSeptember 2005, or about $23.4 billion on an annu-al basis (U.S. Department of Veterans Affairs, 2005).Veterans’ compensation is not included in ournational estimates of workers’ compensation.

Table H-6 provides information on the Veterans’Compensation program. This program is somewhatsimilar to workers’ compensation in that it is


financed by the employer (the federal government)and compensates for injuries or illness caused on thejob (the armed forces). It is different from otherworkers’ compensation programs in many respects.With cash benefits of about $23.4 billion in 2005,veterans’ compensation is about 78.3 percent of thesize of total cash benefits in other workers’ compen-sation programs, which were $29.9 billion in 2004.Because it is large and qualitatively different fromother programs, veterans’ compensation benefits arereported, but they are not included in national totalsto measure trends in regular workers’ compensationprograms.

Railroad Employees and Merchant Seamen.Finally, federal laws specify employee benefits forrailroad workers involved in interstate commerce andmerchant seamen. The benefits are not workers’compensation benefits and are not included in ournational totals. Instead, these programs providehealth insurance and short-term and long-term cashbenefits for ill or injured workers whether or nottheir conditions are work-related. Under federal laws,these workers also retain the right to bring tort suitsagainst their employers for negligence in the case ofwork-related injuries or illness (Williams and Barth,1973).


Table H3

Black Lung Benefits Act, Benefits and Costs, 1997–2004 (In thousands)

1997 1998 1999 2000 2001 2002 2003 2004

Total Benefits $1,095,585 $1,000,383 $982,787 $929,690 $872,787 $826,980 $771,149 $713,932

Part C Compensation 388,656 373,707 360,470 346,903 332,620 316,585 303,724 289,699

Medical Benefits 92,041 80,450 74,776 69,322 61,136 65,756 59,739 52,992

Part B Compensation 614,888 546,226 547,541 513,465 479,031 444,639 407,686 371,241

Total Direct Administrative Costs 25,759 31,030 33,246 32,866 34,657 36,123 37,393 38,062

Part C (DOL) 25,759 26,698 29,023 28,591 29,897 31,488 31,991 32,157

Part B (SSA) * 4,332 4,223 4,275 4,760 4,635 5,402 5,905

Trust Fund Advances from

U.S. Treasuryb 370,000 360,000 402,000 490,000 505,000 465,000 525,000 497,000

Interest Payments on Past Advances 470,635 494,726 515,016 541,117 567,814 595,589 620,582 650,579

Coal Tax Revenues Received

by the Black Lung Trust Fund 635,342 634,270 569,704 512,799 511,520 588,000 480,080 577,575

Indirect Administrative Costsa 19,903 20,115 20,882 21,348 22,207 23,050 23,459 23,914

* information not available(a) Includes legal and investigative support from the Office of the Solicitor and the Office of the Inspector General, services provided by

the Department of the Treasury, and costs for the Office of Administrative Law Judges (OALJ) and the Benefits Review Board (BRB).(Note: OALJ and BRB costs are not included for any other program, but cannot be separately identified for Coal Mine Workers’Compensation).

(b) Total Trust Fund debt (cumulative advances) at the end of CY 2004 was $8,740,557,000. In the recent past, most, if not all, of theseadvances were necessary to pay interest charges on past debt.



This report includes in national totals for workers’compensation those federal programs that arefinanced by employers and that are not otherwiseincluded in workers’ compensation benefits reported

by states in 1997 through 2004. The accompanyingtables provide detailed information on federallyadministered programs, including some that are notincluded in national totals in this report.

Table H4

Energy Employees Occupational Illness Compensation Program Act, Part B Benefits and Costs, 2001-2004(in thousands)

2001 2002 2003 2004

Total Benefits $67,341 369,173 303,981 275,727Compensation Benefits 67,330 363,671 288,274 250,123Medical Benefits 11 5,502 15,707 25,604

Direct Administrative Costs 30,144 68,777 65,589 94,077Total Costs 97,485 437,950 369,570 369,804


Table H5

Radiation Exposure Compensation Act, Benefits Paid as of March 7, 2006 (benefits in thousands)

Claim Type Claims Benefits

Downwinder 9,634 481,670Onsite Participant 945 67,370Uranium Miner 3,726 371,899Uranium Miller 686 68,600Ore Transporter 136 13,600

TOTAL 15,127 $1,003,139

Source: U.S. DOJ 2006.


Table H6

Federal Veterans’ Compensation Program, Compensation Paid in September, 2005(benefits in thousands)

Class of Dependent Number Monthly Value

Veteran Recipients - total 2,636,979 $1,953,621

Veterans less than 30 percent disabled (no dependency benefit) 1,199,271 171,956Veterans 30 percent or more disabled 1,437,708 1,781,665

Without dependents 455,347 525,079With dependents 982,361 1,256,586

Spouse only 666,815 890,165Spouse, child or children 247,650 282,806Spouse, child or children, and parents or parents 847 1,584Spouse, parent or parents 1,160 2,374Child or children only 63,208 74,149Child or children, and parent or parents 374 672Parent or parents only 2,307 4,837

Total dependents on whose account additional compensation was being paid 1,465,485 -

Spouse 916,472 - Children 543,849 - Parents 5,164 -

Source: U.S. Department of Veterans Affairs 2005, Table 12.


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