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Changes to the Workers’ Compensation Industry
As businesses continue to adopt a “digital first” approach, it will have an impact on workers’ compensation. From safer work environments to the increased use of telehealth, workers’ comp rates and policies will likely continue to shift in the coming years.
5 Workers’ Comp Industry Trends in 2023
1. Safer Work Environment Over Time
Businesses have been working harder to maintain safer workplaces by improving their risk management plans. This may help to decrease the chances [MRS(C1] of an employee getting a work-related injury. It has also reduced the amount of workers’ compensation claims resulting from workplace accidents. Focusing on fixing safety issues in your work environment can help you save money in the long run, because it’ll lower your workers’ comp premium.
2. A Growing Gig Economy
Independent contractors, freelance writers, contractors in the construction industry, Uber drivers and consultants are all part of the gig economy. Are these occupations covered by workers’ comp? Most of the time they’re not. And the number of Americans turning to the gig economy has been increasing in recent years. In 2021, 16% of American workers have earned money through the gig economy.1 Over time, this will likely decrease payroll in the workers’ compensation system.
3. Advancing Technology
Widespread adoption of technology, like telehealth and telemedicine, is expected to become more common in the workers’ compensation industry in 2023. Telehealth can help provide injured employees with:
- Instant treatment
- Easy access to medication
- Personalized health care
- Time savings by not having to visit the doctor’s office
- Mental health support
This can help injured employees return to work quicker. It can also help reduce their total medical costs and claim costs.
4. COVID-19
State workers’ compensation policies vary. However, many state workers’ comp policies offer coverage for “occupational illnesses” arising from work and exclude “ordinary diseases,” like the flu.2 The COVID-19 pandemic has created a new situation where jobs that were previously not considered dangerous now are. This means that compensation for the effects of COVID-19 will depend on your policy, state and business.
5. Regulatory & Legislative Reform
According to the National Council on Compensation Insurance (NCCI), the 2023 workers’ comp rates are based on pre-COVID-19 premiums and loss data.3 In 2022, eighteen states have established laws or orders that extend workers’ comp benefits for employees who contract COVID-19 on the job.2 To learn more, visit your area’s state fund website. Federal employees may also receive workers’ compensation if they’ve contracted COVID-19 on the job. You can read more on the Department of Labor’s website.
The opioid overutilization policy may also impact workers’ compensation trends in 2023. This policy aims to prevent the misuse of opioids. With a reduction in opioid usage, this could potentially decrease drug costs for the workers’ comp system.
The Future of the Workers’ Compensation Industry
The workers’ compensation trends mentioned above can impact workers’ compensation rates. Traditional insurance agencies can work together in the future to provide the right coverage and plans for customers. Insurance agencies can also work with insurance carriers and other key players to embrace plans that deliver the best outcomes.
In addition, state legislative reform can impact workers’ compensation trends. This can include changes to the fee schedules for pharmacies, COVID-19 updates or changes to make things more efficient for customers.
The insurance industry is rapidly evolving and insurers can’t ignore it. Cloud computing and block chain management can help insurers stay ahead of the curve. These technologies can help process data for workers’ compensation benefits and workers’ compensation coverage. How the insurance industry reacts to the technological changes can impact workers’ compensation insurance trends in coming years.
Looking for more information about workers’ compensation or other business insurance coverages? Get a quote from us today.
Last Updated: March 6, 2023
1 Pew Research Center, “The State of Gig Work in 2021.”
2 National Council on Compensation Insurance (NCCI), “COVID-19 and Workers Compensation: What You Need to Know: Frequently Asked Questions – UPDATE.”
3 National Council on Compensation Insurance (NCCI), “COVID-19 Workers’ Compensation Presumptions Update: Five Things You Need to Know.”