completing a workers' compensation form on a laptop

5 Prevalent Workers’ Compensation Insurance Trends for 2021

The effects of the COVID-19 pandemic severely affected the US economy, and it’s currently in recovery mode. Various industries are also feeling the effects and workers’ compensation insurance is no exception.

According to IBISWorld, the impact of COVID-19 on this industry could cause a decline in overall revenue, an increase in coverage for illnesses related to COVID-19, and lower demand because of changes in the workforce.

What does this mean for your business and coverage for your workers? Read on to see some of the workers’ compensation trends for 2021 and how they may affect you.

What Is Workers’ Compensation Insurance?

Workers’ compensation insurance is also referred to as workers’ comp or workman’s comp. It is a type of insurance that provides medical benefits to employees who suffer an injury or illness at work. These include:

  • Coverage of medical expenses
  • Replacement of wages lost because of recovery time needed
  • Provision of disability benefits
  • Funeral expenses if the injury results in the loss of the worker’s life

Employers also benefit from workers’ compensation. It can provide coverage of your legal expenses if an injured or ill employee, or their family, sues your business.

The Importance of Workers’ Compensation

Workers’ compensation has been around for centuries. It is an expense that is fully paid by employers and forms part of an employee’s medical benefits.

What constitutes an injury will vary from state to state. However, there is usually a distinction made between injuries that disable and those that impair a worker.

Any claim filed by an employee is usually handled by compensation boards created by your state’s legislature. Workers’ compensation insurance for small businesses is particularly important because it protects both the employer and their workers.

It ensures that no matter who’s at fault when an accident occurs at the workplace, that the injured worker gets the care he/she needs. Besides medical coverage and wage replacement, it provides death benefits to the dependents of the employee.

Unfortunately, injuries that occur on the job often result in litigation. Workers’ compensation also protects employees when there are legal complications because of an injury at the workplace.

5 Workers’ Compensation Trends to Expect in 2021

As an employee, it’s important to keep up with changing trends in the workers’ compensation industry. This is even more relevant because of the pandemic.

This might include changes in the cost of premiums, or the number of claims filed. Here are a few that you should look out for in 2021.

1. The Effect of COVID-19

Workers’ compensation policies will vary from state to state because of COVID-19. Before the pandemic, many states offered coverage of ‘occupational illnesses’, but excluded illnesses such as the flu as it’s considered an ‘ordinary disease’.

Jobs that weren’t considered dangerous are now being classified because of COVID. This classification will depend on the type of business, the state you’re in, and your policy.

There was even a change to workers’ compensation insurance in NJ where employees who contract COVID-19 may be eligible for workers’ compensation. Based on the Senate Bill 2380 signed into law on September 14, 2020, there’s a rebuttal presumption of workers’ comp coverage for essential employees who contract the virus during a public health emergency.

This also applies to workers exposed to the virus while at work who have to self-quarantine based on instructions from a healthcare provider or public health authority.

2. Safer Work Environment

Businesses continue to work on improving and maintaining the safety of their workers and workplaces, more so now than ever before. These enhanced safety features will lessen the chances of workplace injuries. Fewer workplace accidents mean there will be a reduction in the number of workers’ compensation claims.

Better workplace safety can help you save money in the long run, as your workers’ compensation premium will gradually decrease.

3. Technological Advancements

Technologies such as telemedicine and telehealth will become more common, especially in the workers’ compensation industry. When employees access telehealth services, they enjoy the benefits of:

  • Easier access to medication
  • Less time or no time spent at a doctor’s office
  • Personalized care
  • Faster treatment

There will probably also be further expansion of these services as 97% of healthcare providers are using this method of care since the pandemic.

4. Increase in Side Hustles

The pandemic also increased the creativity of many workers. Many delved into non-traditional occupations after being laid off or tried innovative ways to supplement their incomes.

There are now many independent consultants and contractors, freelancers, virtual assistants, and Uber drivers. This new trend often leads to the question of whether workers’ compensation coverage applies to these new occupations. It usually doesn’t.

However, the steady increase in these types of jobs will continue and result in a decrease in the payroll in the workers’ compensation system.

5. Lifestyle Changes

The hectic pace of life often leads to poor health and wellness habits. In the US, there has been a rise in comorbidities.

Comorbidity in a patient involves the presence of one or more medical conditions besides a primary condition. These can include high blood pressure, diabetes, or heart disease.

The rise in these conditions also affects workers. Comorbidities often increase the severity of illnesses or injuries. This can also affect an employee’s recovery time after an injury.

Claims involving comorbidities have not only tripled since 2000, but the average cost of the claims is usually twice as much as claims not involving comorbidities. You can try to combat this by promoting health and wellness initiatives at your workplace.

Business Insurance That Works for You and Your Employees

There are new trends in 2021 that will affect workers’ compensation insurance. Many of these directly result from the pandemic, as many businesses changed the way they worked.

This included having employees work remotely and seeking medical treatment virtually through telehealth services. Some of these changes affected workers’ compensation policies and rates.

Oliver L.E. Soden Agency can help you make sense of these new trends. We provide comprehensive business insurance policies including workers’ compensation packages.

Contact us and request a quote for business insurance that works for you and your employees.