EMPLOYER WORKERS’ COMP COSTS DROP AGAIN
Workers’ comp is not a significant cost for most employers. In fact, three-quarters of New York’s employers pay less than $5,000 for their workers’ comp insurance, and 96% of New York’s employers pay less than $50,000 per year.
Not only is workers’ comp insurance a low cost way to provide significant worker benefits, in recent years that cost has plummeted. Employers saw cost reductions of 4.5% in 2017, 11.7% in 2018, 10% in 2019, 1% in 2020 and 6.4% in 2021. Taken together, an employer whose payroll and other factors have remained the same since 2016 is paying 30% less for workers’ comp coverage in 2021 than it did five years ago.
These cost reductions have not hurt the insurance industry. Based on the available data, it can be (very conservatively) estimated that workers’ comp insurers raked in nearly 4 billion in profits during the same five years that employer costs dropped 30 percent.
And there’s more. In addition to paying premiums employers and insurers also pay assessments that go to fund the payment of some claims, the operations of the state Workers’ Comp Board, the Hazard Abatement Board, and the New York State Occupational Health Clinic Network. From 2010 to 2012 the average assessment rate was 19%. From 2020 to 2022 it will average 11.4% - nearly a forty percent drop.
With huge employer savings and huge insurance company profits, it’s clearly time to balance the equation by improving benefits for injured workers.