In yet another year of COVID-19 regulations, the workers’ compensation industry will face more challenges. Workers’ compensation covers the cost of medical care and rehabilitation for workers injured on the job. Businesses are still experiencing staffing shortages, evolving regulatory changes, and more. This means new guidelines for compliance, new coverage options, and the need to be adaptable.
Workers’ compensation remains to be a stable and profitable segment of the commercial insurance industry. However, since the beginning of COVID-19, claims are rising at exponential levels. Experts have stated that there is a variety of factors that are driving up the costs of claims when a workplace injury occurs. Below is a list of factors that are driving up the costs of claims:
- Aging workforce
- Medical inflation
- Rising wages
- High indemnity costs
- Catastrophic injury severity
According to the Bureau of Labor Statistics (BLS), in 2021, 23% of the U.S. workforce was older than 55. Workers’ compensation claims for these employees accounted for 31% of the total cost. The changing workforce and rising medical costs were top concerns within the workers’ compensation sector. If you have elderly workers who take longer to recover from an injury and less-experienced workers who get injured more often, you end up with a handful of claims. The International Labor Organization (ILO) reported that 2.3 million men and women experience work-related injuries every year. With many businesses experiencing labor shortages, they are forced to hire someone who may be less experienced and may need additional training, which could put them at a greater risk for injury.
- Increase in treatment per injured worker
- Services rendered in a hospital setting
- More expensive care
- Mergers between medical facilities
- Consolidation of physician practices
- Outpatient "ambulatory" hospital services
Partner With A PEO Today!
As a business owner, do you feel that your workers’ compensation claims are through the roof? A Professional Employer Organization (PEO) like GMS partners with businesses to control their workers’ compensation insurance rates and protect them from costly claims. Our team of experts work hard to help you save money and prevent your workers from injuries on the job. Embrace workers’ compensation management so you can keep the focus on growing your business. Contact us today!