August 20, 2017

MN DLI: Long-term Downward Trend Continues in Workers’ Comp Claims, Insurance Cost

St. Paul, MN – The Department of Labor and Industry recently released its 2015 Minnesota Workers’ Compensation System Report, which found that the number of paid workers’ compensation claims fell 53 percent relative to the number of full-time-equivalent (FTE) employees from 1997 to 2015.

Significant findings

  • The number of paid claims fell from 8.7 per 100 FTE employees in 1997 to 4.1 in 2015.
  • The cost of the workers’ compensation system for 2015 amounted to $1.28 per $100 of payroll. In Minnesota and elsewhere, this cost follows a multi-year insurance pricing cycle. However, comparable points in the cycle for Minnesota indicate a long-term downward trend.
  • Adjusted for average wage growth, average medical benefits per claim were 74 percent higher in 2014 than in 1997; indemnity benefits per claim were 36 percent higher. Medical benefits per claim have been stable (relative to average wages) since 2008 and indemnity benefits since 2003.
  • Despite higher benefits per claim, costs are down relative to payroll because of the falling claim rate. Compared to 1997, indemnity benefits per $100 of payroll were 34 percent lower in 2015 and medical benefits were 27 percent lower.
  • In 2015, on a current-payment basis, medical benefits accounted for an estimated 35 percent of total system cost, followed by insurer expenses at 32 percent and indemnity benefits other than vocational rehabilitation at 29 percent.
  • The percentage of indemnity benefit claimants receiving vocational rehabilitation services rose from 15 percent in 1997 to 25 percent in 2015.
  • The percentage of indemnity claims with a dispute of any type rose from 16 percent in 1997 to 21 percent in 2008, but has been stable since then.

This report, part of an annual series, presents data from 1997 through 2015 about Minnesota’s workers’ compensation system. The purpose of the report is to describe the current status and direction of the system and to offer explanations, where possible, for recent developments.

It is available here: MN DLI: 2015 Minnesota Workers’ Compensation System Report

Copies of the report may also be obtained by calling (651) 284-5030 or 1-800-342-5354.

Source: MN DOLI

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