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Aging Workforce Has Far Less Negative Impact on Workers Comp Claims

Posted on: November 8, 2012 by Caitlin Morgan

Aging Workforce Has Far Less Negative Impact on Workers Comp Claims

Aging Workforce Has Far Less Negative Impact on Workers Comp Claims

There is growing evidence that an aging workforce has a far less negative impact on workers comp claim costs than might have been thought, according to new analysis by the NCCI Holdings. NCCI looked at a study by Ray Fair entitled “Estimated Age Effects in Athletic Events and Chess”, which cites that age-related deterioration rates are slow and gradual up until age 80. They also looked at their own study on the aging workforce published in 2011, and found it to be in line with Fair’s study. NCCI had concluded that costs for workers in the 35-and-older-age cohorts tend to be quite similar, although higher than costs for workers between 16 and 34. The higher costs are largely offset by higher premiums due to higher wages of older workers.

The NCCI in looking at its own findings and that of Fair’s study sees the results as reassuring for the workplace as its population ages. Other key observations from the NCCI analysis include:

  • Across all age cohorts, for a range of specific diagnoses, the shares by type of workplace injury (i.e., temporary total, permanent partial, and medical only) are comparable. The shares of claims due to, for example, a neck sprain that were temporary total injuries are virtually identical for both younger and older workers.
  • Factors accounting for increases in severity (mix, quantity, and price) over the course of two time periods (1996/97 to 2000/01 and 2001/02 to 2007/08) are quite similar across age cohorts.
  • For all age cohorts, changes in the mix of leading diagnoses account for a marginal share of the increase in severity for both periods, but the impact is slightly larger in the late 1990s than in the 2000s.
  • Injuries due to high severity diagnoses have historically been more common for older workers, but those high-severity diagnoses are now becoming common in younger-age cohorts as well.
  • Quantity is more important for all age cohorts in the late 1990s when both duration (number of days with indemnity payments) and number of treatments per claim were increasing.
  • Price is a more significant factor across age cohorts in the 2000s, primarily because duration and treatments per claim fell.
  • Employers are implementing safety and loss control programs to address the aging of the workforce.

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Source: NCCI Holdings

Posted in: Workers Comp Workers Compensation