Workers’ compensation costs to employers relative to payroll declined slightly in the third quarter of 2004, reversing a general trend of rising costs that began in the first quarter of 2002. The employers costs are analyzed in "Workers’ Compensation Costs for Employers: Quarterly Data for 2002 to 2004" by John Burton. The employers’ costs of workers’ compensation as a percent of payroll for all non-federal employees declined to 2.27 percent of payroll in September 2004 from a recent peak of 2.31 percent of payroll in June 2004 (Figures I). The article also indicates that the cumulative increase in workers’ compensation costs as a percent of payroll for all non-federal employees was 22.7 percent in the eleven quarters between March 2002 and September 2004 (Table 4).

Alan Kuker and Donald Elisburg report on an important development in the Florida workers’ compensation program in "Workers’ Compensation Settlements and Child Support Arrearages." The state adopted an innovative program that recovers arrearages in child support payments from workers’ compensation settlements. While several other states have similar programs, the Florida experience should provide a model for all remaining states lacking such protection for children.

"A Primer on Workers’ Compensation" by John Burton provides an overview of workers’ compensation that ideally will be of valuable to both neophytes and aficionados in the area. The article places particular emphasis on the developments in workers’ compensation insurance arrangements. Since the 1980s, several states have established competitive state workers’ compensation funds, while two states have abolished their funds. Meanwhile, the workers’ compensation markets for private carriers have been deregulated in most states. These changes in insurance arrangements produced some expected results (certain types of deregulation are associated with lower insurance costs) and some surprising results (states with competitive state funds have higher insurance costs than states with only private carriers).

Information on the Workers’ Compensation Policy Review

The Workers’ Compensation Policy Review is published six times a year. Requests for sample copies or for subscription information can be sent by mail to WCPR, 56 Primrose Circle, Princeton, NJ 08540-9416; by FAX to 732-274-0678; or by filling out our online form.