Insight, analysis & opinion from Joe Paduda


Is the low work comp injury frequency rate a myth?

More than 75,000 work comp injuries were not reported in just three cities last year. Close to a million may have gone unreported nationally.
Yesterday’s news (sub req) that 92% of low-wage workers don’t file work comp claims for injuries that require medical attention was a shocker. I’d long thought the actual injury rate is higher than the reported rate – but nowhere near that high.
Fully half of the workers with on the job injuries “experienced an illegal employer reaction”, including firing the worker, calling immigration authorities, or telling the worker not to file a comp claim.
Here’s a quick summary from the piece in WorkCompCentral:

The survey found:
* 43% of the injured respondents were required to work despite their injury.
* 30% said their employer refused to help them with the injury.
* 13% were fired shortly after the injury.
* 10% said their employer made them come into work and sit around all day.
* 4% said they were threatened with deportation or at least notification to Immigration and Customs Enforcement.
* 3% were told not to file a workers’ compensation claim.
* 8% were told by employers to file a claim.

You can read the WCC or other article to understand the methodology, which looks pretty solid. And some of the stats above aren’t as troubling as they might first appear – requiring injured workers to work, or come in and not work, may be OK if the injury wasn’t that severe. I’m trying to give the employer the benefit of the doubt here, but for those workers who were threatened, whose employers refused to help with the injury, or were fired because of the injury there is not only a work comp problem, there’s a legal, ethical, and moral failing.
As our economy has become more service-based, the number of low wage jobs has increased – jobs that are held by people that tend to be minorities, undereducated, and recent immigrants, legal or undocumented. My sense is the drop in work comp claim frequency may be – at least partially – due to the failure to report injuries as well as structural changes in the economy and improvements in safety and loss prevention.
The study looked at a population that accounts for fifteen percent of all workers in three cities; Chicago, New York, and Los Angeles. Extrapolating the numbers out in just those three cities indicates that 75,446 workers comp injuries were not reported.
Moreover, according to the study, “workers compensation insurance paid the medical expenses for only 6 percent of the workers in our sample who visited a doctor for an on-the-job injury or illness.” [emphasis added]

What does this mean for you?

For the comp industry, the declining frequency years may be coming to a screeching halt.
If you’re a work comp payer, you’ve been ‘lucky’ if you insure these businesses. That ‘luck’ will soon change as the Department of Labor is dramatically ramping up enforcement efforts. (I don’t mean to imply that comp carriers have somehow been complicit in this, in fact the opposite is much more likely as insurers work very hard to ensure rapid and accurate claim reporting.)
If you’re a TPA or other servicing entity, your revenues have been suppressed by the failure to report injuries.
And if you’re one of these low-wage workers, perhaps there’s hope that the situation will improve.

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Joe Paduda is the principal of Health Strategy Associates




A national consulting firm specializing in managed care for workers’ compensation, group health and auto, and health care cost containment. We serve insurers, employers and health care providers.



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