Minnesota Paid Workers’ Comp Claims Drop by Over 50% in 2 Decades

A recent report shows the number of paid workers’ compensation claims in Minnesota fell 54 percent relative to the number of full-time-equivalent (FTE) employees from 1996 to 2016.

The 2016 Minnesota Workers’ Compensation System Report released by the state’s Department of Labor and Industry is part of an annual series and presents workers’ comp system data from 1996 through 2016.

It shows the number of paid claims fell from 8.8 per 100 FTE employees in 1996 to 4.0 in 2016. The cost of the workers’ comp system in 2016 was $1.24 per $100 of payroll. Other significant findings include:

• Adjusting for average wage growth, both medical and indemnity benefits per insured claim rose rapidly between 1996 and 2003 but stabilized or grew more slowly since 2003.
• Despite higher benefits per claim since 1996, costs are down relative to payroll because of the falling claim rate. Compared to 1996, indemnity benefits per $100 of payroll were 40 percent lower in 2016 and medical benefits were 30 percent lower.
• In 2016, on a current-payment basis, medical benefits accounted for an estimated 35 percent of total system cost, followed by insurer expenses at 31 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 2016.
• The percentage of indemnity claims with a dispute of any type rose from 16 percent in 1996 to 21 percent in 2008 but has been stable since then.
• In 2016, on a current-payment basis, the three largest components of total workers’ compensation system cost were medical benefits (35 percent), insurer expenses (31 percent) and indemnity benefits other than vocational rehabilitation (29 percent).
• Pure premium rates for 2018 were down 51 percent from 1996 and were the lowest since that year.
• Both claim disputes and claimant attorney involvement have increased since 1999. The percentage of paid indemnity claims with claimant attorney involvement increased by 46 percent between 1996 and 2015.
• For injury year 2016, total claimant attorney fees are projected at $57 million. These fees accounted for an estimated 3.7 percent of total cost of the workers’ comp system.

A copy of the full report may be found on the Minnesota Department of Labor and Industry website at: http://www.dli.mn.gov/RS/WcSystemReport.asp.