Effects of Aging on Workers’ Compensation

Ready or not, the aging workforce is affecting the claims handling process in our workers’ compensation system.

 

 
Current Trends in the American Workforce

 

According to the US Bureau of Labor Statistics, there has been a steady increase in the average age of workers. In 1980, the average age was 34.2 years. This has steadily increased to 42.3 years old as of 2012, and it continues to get older. This trend mirrors the age demographics of the US population. Not only are we getting “older” as a society, but also people are working longer.

 

 
Realities of the Current American Workforce

 

1. People are living longer lives and staying active in the workforce for longer periods
2. The “Great Recession” has impacted the “Baby Boomers”
   1. Working longer due to losses in 401Ks
   2. Loss of other assets/value in real property
3. Increasing pressure and underfunding of the Social Security system = decreased benefits
4. Increasing dependence on other social “safety net” programs

 

 
How Are Employers Reacting

 

Employers are reacting to the ever-changing demographics of the workforce with varying degrees of concern. According to the DMEC & Cornell University—State of the Field: Absence and Disability Management Practices for an Aging Workforce report, just over 85% of employers are “very’ or “somewhat” concerned about the aging workforce. However, a vast majority of the survey respondents indicate they have not considered aging related issues in their absence and disability programs.

 

 
Understanding the Social Security Disability Insurance (SSDI) Process

 

The process of moving disabled workers off a company Long Term-Disability plan to SSDI can be a cumbersome process. On average, a SSDI award can take roughly 400 days. While older workers tend to have lower injury rates, countless studies indicate that once this segment of the workforce is injured, they tend to be off of work for longer periods of time. Effective “Return to Work” efforts are the single best method to help the disabled gain financial independence.

 

Dealing with injured workers who are Medicare beneficiaries can create issues when resolving workers’ compensation claims.

 

 

Barriers to Effective Return to Work

 

Three main barriers result in ineffective return to work programs:

 

1. Medical barriers: Real or perceived condition of their disability
2. Employer barriers: Understanding/accommodating work restrictions
3. Barriers of the employee: Competition from younger workforce and inability to adapt to changed work environment

 

 
Tips for Employers to Deal with the Aging Workforce

 

The American workforce is changing—employers need to be proactive. Higher rates of disability following injury require you to be creative. There is no simple solution to mitigating workers’ compensation costs and considering the impact older workers have on programs. By being proactive on these issues, employers can save time and money in the future.

 

1. When selecting an insurance carrier or TPA, be sure to understand their philosophy on dealing with work injuries and the aging American workforce.
2. Innovation and creativity must come from employers. A solution that might be effective in one part of the country may not fit the diverse needs of people located in other regions.
3. Do not believe that all injured workers want to stay off of work. Recent studies demonstrate as a whole, injured workers want to be working—they may just lack the resources.
4. Understand the law when it comes to the rights of an injured worker. Employers should also be aware of age discrimination related issues.

 

 

Author Michael B. Stack, CPA, Principal, 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].

 

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Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional.