Workers’ compensation insurance provides protection for employees injured on the job and is granted on the basis of a detailed medical evaluation and medical records review. Since the review of medical documentation is rather complex, it is habitual for workers’ compensation attorneys to utilize medical review services to speed up the process and determine whether a claim has validity. Workers’ compensation often poses a major concern for employers with some industries having more claims than others and therefore increased costs.
Changing economic and medical trends are likely to have considerable impact on workers’ comp insurance. These trends may have positive as well as negative effects, with some of these changes creating problems for the industry and some others offering insurers a chance to improve their services and enhance efficiency. Here is a look at some of the major trends that could have relevance for this industry.
- Increasing medical claim costs: Workers’ compensation medical costs are on the increase steadily. Medicaid and Medicare provide less funding for treatment compared to workers’ compensation insurance. This encourages people to make workers’ comp claims whenever possible. There is also the issue of increasing health insurance deductibles, which may prompt employees to claim workers’ compensation.
- Increasing trend of digitization: This is a positive trend, which can be put to good use. Now patients can view their health records online via secure portals. Email communications allow them to discuss medical issues with their physicians. By adopting similar technology, workers’ comp insurers can cut costs and boost customer satisfaction. An example would be customized mobile apps that could speed up claims processing.
- Lethargic wage increase: Studies show that since 2008 wages have grown rather slowly. This has a direct impact on workers’ compensation because insurers determine rates on the basis of staff wages. When medical costs increase, it may not be possible to keep the premiums steady.
- Opioid addiction: Opioid addiction is becoming widespread among Americans, especially after injuries. The issue here is that many addicts utilize insurance payments to pay for long-term opioid use. They usually become incapable of working for long periods of time. The challenge before the workers’ comp industry is to find effective ways to prevent and discourage drug misuse.
- Telecommuting: Employers allow workers to work offsite from their homes and other locations with a view to reduce costs. However, it is harder in these instances for supervisors to maintain safe work environments. So insurers need to develop an efficient and fair strategy to serve companies that have numerous telecommuters.
- Issues posed by legalized cannabis: With more states legalizing marijuana, there could be an increase in claims requesting funds for medical marijuana. Insurers will have to determine if this is really an effective treatment for the claimant. In addition, they have to consider the potential for cannabis to cause workplace injuries.
- Increasing incidence of obesity: U.S workers are becoming more and more obese, and overweight workers file twice as many claims as healthy weight workers, according to the American Medical Association. Compared to healthy weight workers, obese employees have 13 times more lost workdays, and indemnity costs are 11 times higher for the most obese workers. This emphasizes the fact that wellness and lifestyle management programs are likely to play a more prominent role in the workplace.
- Aging workforce: The U.S. Census Bureau notes that by the year 2025, there will be nearly as many people 85 years and above, as there are 70-74 year old people today. There is all likelihood that older workers will continue as part of the workforce, with seniors finding that they cannot fully retire on their retirement savings. Employers will have to find means to accommodate the surge of older workers. Medicare will not pay anything as long as workers’ comp is available. It will pay only if costs remain after all workers’ comp medical benefits are exhausted. Medicare also has the right of recovery from the employer or workers’ comp insurer if it does pay a bill.
Another concern is the impact workers’ compensation claims will have on social security retirement income. When a disability income recipient reaches the full benefit retirement age, the disability benefit turns into a retirement benefit automatically. This retirement income is not offset for workers’ compensation indemnity payments. Disabled workers age 66 and above could collect both benefits, which could lead to increased costs.
To adapt to the changing trends and remain successful, insurers and employers must identify ways to accommodate evolving technology, demographics, and workplace accidents. While making the most of the positive trends in healthcare and the economy, they should also prepare for changes that could bring new kinds of risks. All organizations should focus on ensuring a safe workplace, thereby preventing injuries and controlling costs. They can encourage workers to get back to work as soon as possible. Employers who recognize the important trends discussed above and have strategies in place to manage these conditions will surely succeed in the long term.