Workers' compensation programs were the first form of widely developed social insurance in the United States. Providing medical care and cash benefits to injured and ill workers, the program was designed to allow employees to maintain financial stability in lieu of time-consuming and cost-prohibitive court actions.
Today, the federal government and each of the 50 states manage workers' compensation programs that in 2008 covered 130.6 million employees at a cost of $5.2 trillion. With the country's struggling economy, rising costs of health care and shifting government priorities, workers' compensation programs will face new challenges in 2011.
More Workers Not Returning to Work
According to industry stakeholders like the National Council on Compensation Insurance, workers' compensation claim frequency is down, but workers are claiming disability benefits longer. The troubled economy is likely largely to blame causing workers to have little incentive to return to work and difficulty finding transitional positions.
Challenges for Companies with Off-Site Workers
The changing employment landscape is another factor in workers' compensation claims. Telecommuting workers - those who work from satellite offices or home-based offices - give employees the flexibility they desire but also result in more exposure for employers. Although employers have less control over off-site offices, they are still expected to provide a healthy and safe environment for those employees working remotely.
Increase in Health Initiatives
The ongoing rise of medical costs is causing a strain on workers compensation programs, but may be partially responsible for companies stressing safety and wellness. Employers, aware that a healthier work force is more productive and less of a drain on strained company resources, now more frequently work to modify jobs for older employees and promote company health and wellness programs.
More Enforcement and Litigation
The Occupational Safety and Health Administration (OSHA) began increasing fines and enforcement activity in 2010 and this pattern will likely continue through 2011. Additionally, although the system was designed to avoid it, litigation will also likely increase because of the broadening of laws including the Americans with Disabilities Act (ADA), the Ledbetter Fair Pay Act, and Genetic Information and Nondiscrimination Act (GINA).
Time will tell how these trends impact the workers' compensation system as a whole, potentially leading to changes or reform of the current workers' compensation system.
