No matter how safe employers and employees try to be, workplace injuries still happen. Hands get caught in machinery. Backs get injured by heavy lifting. Repetitive motions strain joints. Bones are susceptible to workplace fractures and workers are sometimes vulnerable to burns and cuts.
The most recent data for workplace injuries by the U.S. Bureau of Labor Statistics (BLS) [1.] showed 2.8 million nonfatal workplace injuries and illnesses in 2019, unchanged from the year before. [2.] Nearly one-third of those incidences (31.7 percent) caused a private industry worker to miss at least one day of work during the year.
[3.] There were 2.8 workplace injury cases per 100 full-time equivalent (FTE) workers. [4.] Injuries and illnesses caused 0.9 missed days per 100 FTE workers and [5.] 0.7 incidences of job transfer or restriction per 100 FTEs.
[6.] Manufacturing accounted for 15 percent of all private industry nonfatal injuries and illnesses in 2019.
[7.] Of the 888,220 injuries and illnesses that resulted in miss workdays in 2019, [8.] about one-third were sprains, strains, and tears. [9.] Soreness and pain accounted for 17.7 percent. [10.] Cuts, lacerations, and punctures accounted for 10 percent of missed work injuries, while [11.] another 9.6 percent were from fractures. [12.] Bruises and contusions accounted for 9 percent of these injuries.
Helping workers recover from injuries and illnesses caused at the workplace is the role of the workers' compensation program.
Workers' compensation insurance is accident coverage paid by employers. If you are injured or sickened on the job, you may receive benefits to cover medical bills or rehabilitation costs. Workers' compensation also covers partial lost wages if you miss work. Some policies also provide death benefits if you’re killed on the job.
Workers' compensation insurance only applies if you are injured or sickened while performing the duties of your job. According to the Bureau of Labor Statistics, [13.] only 1 percent of American workers missed work due to an occupational injury or illness.
Learn More: Workers' Comp vs. Disability Insurance
A few examples of states that have published workers compensation claims data include:
- [14.] Florida, where there were 73,254 claims in 2020 for an average benefit of $20,146.
- [15.] Michigan, where there are approximately 20,000 individuals each year who receive workers' compensation for a work-related injury or illness, down from approximately 27,000 in 2007.
- [16.] Oregon, which reported 21,896 claims in 2020, which was 1.2 claims for every 100 employees in the state. Just under 12 percent of disabling claims were initially denied by insurers.
- [17.] Texas, which reported 99,850 claims in 2020, a significant increase over 73,628 in 2019.
According to the Bureau of Labor Statistics, [18.] it costs employers an average of $957 a year per worker to provide legally required workers' compensation. [19.] This accounts for about 1.2 percent of the total average employee compensation costs incurred by employers, which includes all wages and benefits. [20.] The average cost is $915 per worker in the private sector and $1,186 per worker in state and local governments.
One recent study showed that [21.] one-quarter of all COVID-19-related workers’ compensation claims in 2020 incurred medical costs. [22.] The average total medical and indemnity cost of a COVID-19 workers' compensation claim last year was $4,320.
[23.] Employees representing the healthcare industry sector accounted for half of all COVID-19 related claims.
[24.] Throughout 2020, the healthcare, transportation, and warehousing sectors were the only groups with a major increase in total workers’ compensation claims reported compared to 2019, both experiencing a 24 percent bump. Most other industry sectors experienced a decrease in the total number of claims.
[25.] Lockton Companies released a study in May 2018 that showed claim denial rates had increased from 5.8 percent to 6.9 percent between 2013 and 2017.
[26.] The company’s study showed the 10 most common reasons for denial were:
- No medical evidence of injury
- No injury per statutory definition
- Reservation of rights, which is an insurer’s notification to an insured that coverage for a claim may not apply
- Pre-existing condition
- Idiopathic condition, which means the cause is considered unknown
- Intoxication or drug-related violation
- Stress non-work related
- Failure to report an accident in a timely manner
- The injured person doesn’t meet the statutory definition of an employee
If your initial workers' compensation claim is denied, you still have a good chance of collecting benefits. [27.] Lockton also found that on average, 67 percent of initial denials convert to paid claims by 12 months.
Sometimes, workers' compensation denials are justified.
It’s difficult to estimate the size of workers compensation fraud, [28.] but one estimate pegged the number at $1 billion a year, [29.] with fraud accounting for 1 to 2 percent of all workers compensation payments.
In 2008 – 2009, [30.] the California Department of Insurance identified and reported 5,174 suspected fraudulent workers’ compensation claims, assigned 539 new cases, made 218 arrests, and referred 327 submissions to prosecuting authorities. [31.] According to the Department, the potential loss amounted to more than $205 million during that timeframe.
According to Employers.com, a small business insurance specialist, [32.] 13 percent of business owners are concerned their employees could commit workers’ compensation fraud.
It isn’t just employees who commit workers' compensation fraud. Employers are sometimes guilty as well. One example is misclassifying employees as independent contractors to avoid paying premiums on workers' compensation coverage. This is especially true in the construction industry, [33.] where as many as 12 to 20 percent of workers were either misclassified or were working off the books.
According to an article published by the National Conference of State Legislatures, the likelihood that a worker returns to full employment is closely tied to the length of their absence from work.
[34.] The chances of returning to full employment after a six-month absence due to injury or illness is 55.4 percent. [35.] That drops to 32.2 percent after one year, and after two years away from work, the chance of ever returning to employment falls to 4.9 percent. The point at which an injury or illness becomes a chronic disability most likely occurs from three to six months into an absence.
Joel Palmer is a freelance writer and personal finance expert who focuses on the mortgage, insurance, financial services, and technology industries. He spent the first 10 years of his career as a business and financial reporter.
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