Minnesota Sees Drop in Paid Workers Comp Claims

For a number of Minnesota businesses, the news is good following a recent report authored by the Minnesota Department of Labor and Industry (DLI).

According to officials, the number of paid workers compensation claims fell 48 percent relative to the number of employees from 1997 to 2011 and pure premium rates were down 29 percent since 1997, according to the 2011 Minnesota Workers Compensation System Report.

“The combination of fewer workers compensation claims and lower workers’ compensation insurance premium costs is good news for Minnesota’s businesses,” said Ken Peterson, DLI commissioner. “Though each workplace accident is one too many, the report underscores that Minnesota’s workplaces have become much safer for employees and comparatively less costly for employers since 1997.”

Among the findings:

• The workers comp claim rate fell considerably from 1997 to 2011, from 8.7 to 4.6 claims per 100 full-time-equivalent employees.

• Pure premium rates for 2013 were down 29 percent from 1997, at their lowest level since that year.

• The 2011 total workers comp system cost was $1.28 per $100 of payroll, slightly above the lowest point since 1997.

• Because of the falling claim rate, total benefits, including medical, cash and rehabilitation, fell 7 percent relative to payroll between 1997 and 2011.

• Medical care accounts for the largest share of total system cost, 35 percent; next, insurance expenses, 31 percent; then cash benefits, 29 percent.

• The percentage of claims with disputes rose from 15.5 percent to 22.0 percent from 1997 to 2011, a 42-percent increase.

• The proportion of claimants receiving vocational rehabilitation services increased from 1997 to 2011. This may contribute to the results of findings of other studies that injured workers in Minnesota get back to work sooner than in most other states.

The report, part of an annual series, offers data from 1997 through 2011 related to aspects of Minnesota’s workers comp system

Author Michael B. Stack, CPA, Director of Operations, Amaxx Risk Solutions, Inc. is an expert in employer communication systems and part of the Amaxx team helping companies reduce their workers compensation costs by 20% to 50%. He is a writer, speaker, and website publisher. www.reduceyourworkerscomp.com. Contact: [email protected].