WCRI: Increase in Temporary Disability Duration in 2020 Seen Across Many States, May Reflect Impact of COVID-19 Pandemic

Cambridge, MA (WorkersCompensation.com) - A new edition of CompScope™ Benchmarks from the Workers Compensation Research Institute (WCRI) found indemnity benefits increasing in most states due to an increase in temporary disability (TD) duration in 2020 as a result of the economic slowdown during the pandemic.

“Although fairly stable from 2015 to 2019, 15 states experienced a 3–11 percent increase in TD duration for non-COVID-19 claims in 2020,” said Ramona Tanabe, executive vice president and general counsel of WCRI. “The economic slowdown during the pandemic may be a factor underlying this general pattern. For example, the temporary  increase in the unemployment rates likely affected workers’ ability to return to work, and resulted in longer duration of TD benefits.”

The following are sample findings for some of the study states:

• Florida: Indemnity benefits per claim in Florida increased 4.5 percent in 2020 for non-COVID-19 claims, driven by moderate growth in duration of TD benefits and wages for workers with injuries, which may relate to the economic conditions in Florida during the early pandemic period.
• Illinois: Indemnity benefits per claim increased 11 percent in 2020; two-thirds of this growth was driven by an increase in duration of TD (about a week); a third of the growth was driven by an increase in wages of workers with injuries.
• Michigan: Total costs per claim in Michigan remained stable in 2020, but the stability masked offsetting factors: rapid growth in indemnity benefits and decreases in medical payments and benefit delivery expenses.
• Minnesota: Duration of TD benefits in Minnesota increased nearly one week in 2020 for non-COVID-19 claims, a key driver of the indemnity growth in that year; increases in lump-sum settlement frequency and payments were another driver of the 18 percent growth in indemnity benefits per claim in 2020.

CompScope™ Benchmarks, 22nd Edition provides ongoing annual monitoring of how indemnity benefits, medical payments, and benefit delivery expenses in 18 states compare and how they have changed over time. The studies analyze non-COVID-19 workers’ compensation claims with injury dates between 2015 and 2020 (evaluated as of March 31, 2021). The 18 states in the study are Arkansas, California, Florida, Georgia, Illinois, Indiana, Iowa, Louisiana, Massachusetts, Michigan, Minnesota, New Jersey, North Carolina, Pennsylvania, Tennessee, Texas, Virginia, and Wisconsin. There are individual reports for every state except Arkansas, Georgia, Iowa, and Tennessee.

For more information on these studies, visit WCRI’s website at https://www.wcrinet.org/reports/compscope-benchmarks-22nd-edition.   

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