Long-term downward trend continues for number of workers' compensation claims, costs of insurance premiums

The number of paid workers’ compensation claims in Minnesota fell 49 percent relative to the number of employees from 1997 to 2014, according to the 2014 Minnesota Workers’ Compensation System Report, just released by the Minnesota Department of Labor and Industry (DLI).

“Again this year, medical treatment for injuries was the chief cost driver for the system, increasing annually per claim by 4.6 percent above average wages since 1997,” said Ken Peterson, DLI commissioner. “To curtail rising medical costs, legislation was approved in 2015 to control increases for inpatient hospital charges and our agency hopes to pass similar controls for outpatient charges during the 2017 session.”

Significant findings

• The workers’ compensation claim rate fell considerably from 1997 to 2014, from 8.7 to 4.4 claims per 100 full-time-equivalent employees.

• The 2014 total workers’ compensation system cost was $1.27 per $100 of payroll. In Minnesota and elsewhere, this cost follows a multi-year pricing cycle. However, there does seem to be a long-term downward trend.

• Because of the falling rate of claims, total costs of benefits, including medical, cash and rehabilitation, fell 18 percent relative to payroll between 1997 and 2014.

• Medical care accounts for the largest share of total system cost, 36 percent; next, insurance expenses, 32 percent; then cash benefits, 28 percent.

• The percentage of claims with disputes rose from 15.5 percent to 20.7 percent from 1997 to 2008, but has shown little change since 2008.

• About 24 percent of cash-benefit claimants received vocational rehabilitation services in 2014, the highest since 1997.

The report, part of an annual series, presents data from 1997 through 2014 about aspects of Minnesota’s workers’ compensation system. The purpose of the report is to describe the current status and direction of workers’ compensation in Minnesota and to offer explanations, where possible, for recent developments. It is available online at http://www.dli.mn.gov/RS/WcSystemReport.asp. Copies of the report may also be obtained by calling

(651) 284-5030 or 1-800-342-5354.