Workers’ compensation claim rates and benefits paid in Minnesota continue to be stable or follow their long-term downward trajectories, a new Department of Labor and Industry (DLI) report shows.
The 2024 Minnesota Workers’ Compensation System Report presents trend data regarding several aspects of Minnesota’s workers’ compensation system from 2002 to the present.
These results stand despite a significant system impact due to COVID-19 starting in 2020. For the past three years, the report has tracked two sets of data for the workers’ compensation system: one for the whole system, including COVID-19 claims, and another for the system excluding COVID-19 claims, which shows a pattern more similar to prior years.
The total cost of Minnesota’s workers’ compensation system relative to payroll follows a multi-year cycle. Comparing similar points in the cycle indicates a long-term decrease that extrapolates to 46% over the 20-year period.
Relative to total payroll, indemnity benefits were down 41% between 2002 and 2022, while medical benefits were down 52%. Relative to the number of full-time-equivalent (FTE) workers, the total number of paid claims dropped by 45%, indemnity claims by 3% and medical-only claims by 56% from 2002 to 2022.
In 2022, on a current-payment basis, the three largest components of total workers’ compensation system cost were medical benefits (33%), insurer expenses (31%) and indemnity benefits other than vocational rehabilitation (30%).
Workers’ comp numbers without COVID-19 impacts
Compared to 2002, the average time an injured worker received total disability benefits was 9% longer in 2022 for non-COVID-19 claims. The average duration of temporary partial disability (TPD) fell 25% by 2022 for non-COVID-19 claims.
After adjusting for average wage growth, total disability benefits (temporary total disability benefits and permanent total disability benefits combined) per paid indemnity claim were largely stable from 2002 to 2019. They decreased 6% from 2019 through 2022 for non-COVID-19 claims.
Permanent partial disability (PPD) benefits per paid indemnity claim fell 65% from 2002 to 2022 for non-COVID-19 claims. Participation in vocational rehabilitation rose from 21% of paid indemnity claims for injury-year 2002 to 24% for 2019 but decreased to 22% among non-COVID-19 indemnity claims for injuries in 2022.
In 2023, 84% of scheduled mediations were completed, while 27% of scheduled medical conferences and 26% of scheduled rehabilitation conferences were completed.
There was an 11% decrease in the estimated number of workers who will receive vocational rehabilitation services for their injuries and illnesses in 2022 compared to 2019.
COVID-19 Impacts on Workers’ Comp
Due to the influx of COVID-19 indemnity claims, the indemnity claim rate increased 44% from 2019 to 2022. This reversed the long-term downward trend (the decline from 2002 to 2019 was 33%).
Total disability duration decreased by 30% from 2019 to 2022 due to the significantly shorter duration of COVID-19 claims, while TPD duration increased by 4% during the same period.
When COVID-19 claims were included, total disability benefits per paid indemnity claim fell 24% from 2019 to 2022. Also, TPD benefits per paid indemnity claim decreased 31% from 2019 to 2022, and the 2022 vocational rehabilitation participation rate is 15% when COVID-19 indemnity claims are included.
There were very few disputes associated with COVID-19 claims — the dispute filing rate was 0.2% for COVID-19 claims in 2023 and 15.0% for non-COVID-19 claims.
The complete report is available at dli.mn.gov/business/workers-compensation/work-comp-minnesota-workers-compensation-system-report.
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