Workers’ compensation benefits and employer costs in West Virginia have dropped sharply compared to the rest of the U.S., but remain nearly twice as high as the national average, according to a report released Thursday.
Nationwide, workers injured on the job are being paid at lower rates, and West Virginians have seen even sharper cuts. The state’s numbers also reflect a dismal employment picture.
Benefits paid to West Virginia’s injured workers decreased almost 21 percent from 2011 to 2015, compared with a 1.1 percent increase nationally, the nonprofit National Academy of Social Insurance said.
The decline from $523 million to $415 million in medical and cash benefits in West Virginia followed changes the legislature enacted earlier, reducing benefits and shifting from an exclusive state fund to a private insurer system that now reviews claims.
“Despite the sharp decline in total workers’ compensation benefits paid … benefits per $100 covered wages were still nearly twice as high in West Virginia as in the rest of the U.S. as a whole,” said Marjorie Baldwin, Arizona State University economist and report co-author.
According to the report, West Virginia’s paid-benefits rate declined to $1.55 per $100 in covered payroll, down from $2.07 five years earlier. Meanwhile, the rate nationally declined from 98 cents to 83 cents.
Employer costs decreased 15 percent in the state, compared with a 21 percent increase nationally.
“West Virginia has gone through a number of workers’ compensation legislative changes in the past decade or so that will influence benefits paid and employer costs,” said Christopher McLaren, academy researcher and lead author. “However, another big factor is West Virginia’s slow economic recovery after the Great Recession. West Virginia’s covered employment levels declined each year from 2012 to 2015, whereas employment is growing in the rest of the nation.”
The report showed employment covered by workers’ compensation declined 0.7 percent to 658,000 workers in West Virginia over the five years, while the numbers increased in every other state. The state’s covered payroll was $27 billion in 2015, up 6.1 percent from 2011.
Benefit rates have been declining since the 2008 recession because overall employment and payrolls have been increasing, work-related injury rates “are at some of their lowest levels in many years, and a number of states have legislated changes affecting total benefits paid and costs, McLaren said.
Many of these changes were “aimed at improving the medical delivery system and there is a greater focus on improving return to work,” he added. “Many states have also altered compensability requirements, changed statutory maximum amounts and durations of benefit levels, and adopted the AMA guides (or the most current versions), which often change overall disability ratings.”
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