Workers' compensation coverage is essential for protecting injured employees and helping them get back to work as quickly as possible. But it's also important for employers to stay up-to-date on the latest trends in workers' compensation insurance and employee health and safety.
Here are some of the most important trends to watch in 2023:
- The rise of telemedicine. Telemedicine has become increasingly popular during the COVID-19 pandemic, and it's likely to continue to be a major trend in workers' compensation in the years to come. Telemedicine allows injured employees to receive medical care virtually, which can save time and money, and it can also help to promote faster recovery.
- The focus on mental health. Employee well-being, encompassing physical, mental and emotional health, is essential for workplace safety and business objectives. To address well-being, businesses should consider mental health initiatives, as poor mental health correlates with workplace accidents and higher costs.
- The impact of inflation. Inflation impacts the commercial insurance market, including workers’ compensation. Medical inflation, wage inflation and higher employee pay are all key contributors to the cost of coverage. Medical inflation has been relatively low due to past profitability and fee schedules in some states. However, it is expected to increase in the future. Wage inflation has risen as businesses increase pay to attract and retain workers, potentially leading to higher workers’ compensation premiums. There could be challenges in maintaining a balance between wages, benefits and premiums, leading to short-term disconnects.
- The surge of mega claims. The surge of exceptionally large claims in recent years, totaling $3 million or more, has impacted the cost of workers’ compensation insurance. These claims typically arise from severe and possibly permanent on-the-job injuries. Mega claims can impact companies as they are often complex to manage and can create significant financial burdens.
- The aging workforce. The past decade has brought on an aging workforce. According to the U.S. Bureau of Labor Statistics, the share of employees over the age of 55 in the labor force is expected to increase to nearly 25% by 2024 (up from 21.7% in 2014). Such a statistic is notable, as the cost of workers’ compensation claims generally increases as employees age. Because health typically diminishes with age, the impact of minor injuries can be more severe for older workers—taking them longer to fully recover.
- The use of wearable safety technology. Businesses are increasingly adopting wearable safety technology to reduce employee injuries and workers' compensation claims. These electronic devices can monitor employees’ behaviors, provide real-time safety instructions and allow safety managers to adjust the work environment. By implementing these devices in the workplace, businesses can promote a safer work environment.
We are here to provide much-needed market expertise. Contact us today for additional risk management guidance and workers’ compensation solutions.