Workers’ compensation benefits as a share of payroll are reaching historically low levels, even as employers shoulder more costs, according to a new report from the National Academy of Social Insurance

Until 1995, the U.S. Social Security Administration (SSA) produced the only comprehensive national data on workers’ compensation benefits, coverage, and costs with annual estimates dating back to 1946. SSA discontinued the series in 1995 after publishing data for 1992 -1993. The National Academy of Social Insurance assumed the task of reporting national data on workers’ compensation in 1997. The Academy published its first report that year, extending the data series from 1993 through 1995, and has produced the report annually ever since.

The 19th annual report of the National Academy of Social Insurance on workers’ compensation benefits, coverage, and costs is now available. This report presents new data on workers’ compensation programs for 2014 and updated estimates for 2010 – 2013 with newly available data. The revised estimates in this report replace estimates in the Academy’s prior reports.

The Academy’s measures of benefits and costs are designed to reflect the aggregate experience of two stakeholder groups: workers who rely on compensation for workplace injuries and employers who pay the bills.

Despite growth in employment during the economic recovery – and the corresponding uptick in employees covered by workers’ compensation – benefits per $100 of payroll fell from $0.97 in 2013 to $0.91 in 2014, the lowest level since 1980. Benefits as a percent of payroll declined in 46 states between 2010 and 2014, continuing a national trend in lower benefits relative to payroll that began in the 1990s.

Costs to employers, on the other hand, continue to climb. Between 2010 and 2014, employer costs associated with workers’ compensation – such as insurance premiums, reimbursement payments, and administrative costs – grew at a rate nearly 5 times faster than benefits. Nationally, employer costs exceeded total benefits in 2014 by $29.5 billion while costs per $100 of payroll reached $1.35, according to the report, Workers’ Compensation: Benefits, Coverage, and Costs (PDF).

“What we are seeing in these data are still the effects of the economy gradually coming out of the recession of 2008-10,” said Marjorie Baldwin, Chair of the Academy’s Study Panel on Workers’ Compensation Data and Professor of Economics in the W. P. Carey School of Business at Arizona State University. “As more workers are hired, employers immediately incur higher costs for workers’ compensation insurance – the increase in benefits paid comes with a lag, especially for the most costly long-term injuries.”

The ratio of benefits paid per $1 of employer cost has varied over the last 20 years from a high of $0.82 in 1999 to a low of $0.63 in 2006. The ratio has declined from $0.81 in 2010 to $0.68 in 2014, but it is still greater than in the five years leading up to the recession of 2008.

“Declining levels of workers’ compensation benefits could mean that workers are getting injured less frequently and/or that they are returning to work sooner when they do get injured,” said Christopher McLaren, Workers’ Compensation Senior Research Associate at the Academy. “But there have been a number of changes in state laws in recent years limiting access to workers’ compensation benefits, which may also be a factor.”