Workers’ Comp Trends: The Evolving Workers’ Comp Environment

Although the workers’ compensation market is strong, this is no time for complacency. Changes in the economy, the workforce, and medical treatments are keeping workers’ comp carriers and the employers they serve on their toes. Let’s take a look at the workers’ comp trends currently impacting costs and coverage.

The State of the Workers’ Comp Market

Employers have been contending with surging property and casualty rates, but workers’ comp lines have been a source of relief. According to MarketScout, workers’ comp lines were up only 0.3% in the second quarter of 2023. For comparison, commercial property was up 10.7% and the composite rate increase across all property and casualty lines was 5%.

In a workers’ compensation supplement titled Workplace Reset, AM Best says the U.S. workers’ comp line has seen an underwriting profit of almost $24 billion in total over the last five years. This surpasses any other major property and casualty line of business. Even though the workers’ comp market is experiencing favorable claims frequency and severity trends, inflation is a concern.

Evolving Treatments

After a workers’ comp claim, a speedy recovery and return to work is in everyone’s best interest. The treatments used in a workers’ comp program can have a significant impact on recovery. In fact, treatment approaches are currently evolving in important ways.

Mental Health: After an injury, workers may experience depression and anxiety. According to Risk & Insurance, these mental health issues can derail claims. In the past, workers’ comp payers resisted paying for behavioral healthcare due to the belief that this would decrease costs, but it may be time for this to change. In fact, payers could save up to $48 billion annually by integrating medical and behavioral healthcare.
Telehealth: Boosted by technological advances and pressure from the COVID-19 pandemic, telehealth has made waves in healthcare. Convenience and accessibility make telehealth an attractive option in workers’ compensation programs, both for the initial triage of injuries and for ongoing care for conditions. According to Carrier Chronicles, the popularity of telehealth has continued to increase since the pandemic. Now, it’s here to stay.
Marijuana: The National Conference of State Legislatures says 38 states allow the medical use of marijuana, as of April 24, 2023. Medical marijuana can be an attractive substitute for opioids in chronic pain management. However, since it is still illegal on a federal level, its use in workers’ comp programs is complicated. Nonetheless, according to Risk & Insurance, several states require workers’ comp insurers to reimburse medical marijuana costs.

COVID’s Lasting Impact

The COVID-19 public health emergency has ended, but COVID is still a factor in workers’ comp programs. According to the

Some states introduced presumptions to make it easier for employees to file workers’ comp claims for COVID. Although many of these provisions expired before or with the end of the public health emergency, NCCI says at least five states (California, Massachusetts, Rhode Island, Florida, and Missouri) have proposed legislation that would establish presumptions for COVID or other infectious diseases beyond the pandemic.

The New Remote Workforce

Remote work has become the norm for many workers. According to a 2023 survey from Pew Research Center, 35% of U.S. adults with a job that is possible to carry out remotely work from home all the time and 41% work from home some or most of the time.

Remote work has several important implications for workers’ comp. One issue is that remote workers who are injured in the course of work may be eligible for workers’ comp benefits – just as in-person workers would be – but as the lines between personal and professional spaces are often blurred, determining which claims are eligible can be more complicated. According to the Financial Post, one tricky claim involved an employee who slipped on the stairs of her home during a scheduled lunch break.

Another complication can occur when remote workers live – and therefore work – in a different state. According to SHRM, employers have had to determine which state rules apply for out-of-state workers for a number of issues, including workers’ compensation, unemployment insurance, and local employment laws.

Workers’ Comp Fraud

Workers’ comp fraud isn’t a new issue, but new AI-powered tools could help combat it.

AM Best says many carriers have been implementing AI tracking and software identification to identify workers’ comp fraud and to prosecute the fraudsters, who may include attorneys, employees, healthcare providers, and employers who misclassify workers, underreport payroll, or engage in other acts of fraud.

Is your coverage keeping up with workers’ comp trends? BNC can help employers in New York, New Jersey, and Connecticut take control of their workers’ compensation programs and drive down costs. Learn more.