Workers' compensation: coverage, benefits, and costs, 1983.
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Biomedical subjects
Publications and source records attributed to D N Price.
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This article was prepared initially for an international conference of social security program administrators and researchers. They examined the reasons for, and implications of, a recent trend in several European countries toward making it easier to qualify for retirement or disability benefits as a way of alleviating long-term unemployment. The article notes that the United States has not followed this trend. Instead, this country has continued to use temporary extensions of unemployment insurance benefits as a way to help the long-term unemployed during recessionary periods. Since the mid-1970's, the emphasis in retirement and disability insurance programs has been to strengthen the financial integrity of these programs rather than to expand eligibility. Described here are the progression of extended benefit provisions of unemployment insurance through the most recent recession, the historical development of early retirement features in the social security program, and the more recent attention that has been paid to the financing issues that have played a central role in legislation during the late 1970's and early 1980's. Unemployment experience and trends toward early retirement are examined, along with the role of public and private employee pension plans that supplement social security retirement benefits. Preliminary data from the Social Security Administration's New Beneficiary Survey show the prevalence of such pension coverage for recent retirees and the extent to which these pension benefits were claimed before normal retirement age.
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Although the workers' compensation program covered more workers and paid more in benefits in 1981 than it did a year earlier, the rise in both of these indicators was slightly smaller than those in 1980 and considerably smaller than the increases that took place in the 1970's. Employers paid $22.9 billion in premiums in 1981, less than 3 percent more than the previous year and the smallest annual increase since 1958. The cost-payroll ratio also showed a 12-point drop in 1981, the first such decline since 1959 and a sharp contrast to the almost 9 percentage point average annual rise in the 1970's. The Black Lung program, which made up more than a fifth of the benefit payments under workers' compensation in 1973, accounted for only about an eighth by 1981.
Because the two systems directly affect each other, the Social Security Administration (SSA) has had a long-standing interest in workers' compensation. In some cases, workers' compensation fills the gaps in protection not covered by Social Security and, in others, it may duplicate such protection. Since 1965, Social Security disability benefits have been subject to reduction if the beneficiary also receives workers' compensation and the combined benefits exceed 80 percent of previous earnings. SSA has also been directly involved in providing income maintenance for disability from work-related diseases since 1969, when the Federal Black Lung program was established. Every 4 years, SSA prepares a new set of benchmark figures to serve as a basis for its series on national workers' compensation benefits and program operations. The 1980 benchmark figures, presented here, provide an opportunity to review program operations during the decade of the 1970's.
Workers' compensation provides medical care and income maintenance protection to workers disabled from work-related injury or illness. This program is of considerable interest to the Social Security Administration (SSA) from several perspectives. For example, since 1965 Social Security Disability Insurance (DI) benefits and workers' compensation payments have been integrated. Information on the experience under workers' compensation provides a framework for examining questions concerning gaps and overlaps in the Nation's social insurance system. In addition, since December 1969 SSA has administered claims filed through 1973 under part B of the Black Lung program--the program providing income maintenance protection to coal miners disabled by pneumoconiosis. The workers' compensation experience reported here consists of information on benefits for work-related injury and disease, including data on the combined benefits paid under the entire Federal Black Lung program administered by the Labor Department and SSA.
At least three-fifths of all workers are under some kind of formal plan offering income replacement during temporary periods of illness, even though there is no national sick-pay program. In 1981, income loss due to short-term non-work-related disabilities totaled +41.3 billion. Sick-pay benefits were +15.6 billion, representing 38 percent of the income that otherwise would have been lost. The replacement rate has been fairly stable since 1974, following earlier periods of uneven increases from the 17 percent recorded for 1948, the first year of this series. This article includes estimates for 1980 and 1981 and revisions for 1978 and 1979 of the income loss and benefits arising from short-term sickness. Also included are the losses and benefits for the first 6 months of long-term disability.
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This article reviews the recent experience of adult survivor annuitants under the Federal civil service retirement program. Data are presented for such persons in terms of their status in December 1975 as primary beneficiaries, secondary beneficiaries, or nonbeneficiaries under the Old-Age, Survivors, and Disability Insurance (OASDI) program. Analysis reveals that 63 percent of the survivor annuitants were dual beneficiaries-that is, they received an OASDI benefit as well as an annuity payment. About half the remaining annuitants were permanently insured under the OASDI program, so it can be anticipated that at least four-fifth of the Federal civil service survivor annuitants ultimately will also receive an OASDI benefit. The survivor annuity replaced 27 percent of a decreased spouse's Federal civil service salary at the median. The median replacement rate of annuity plus OASDI benefit was 48 percent of civil service salary.
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Workers' compensation is one of the few State-administered income-maintenance programs operating throughout the United States. The national "system" to provide benefits for work-caused disability and death actually consists of 50 independent State operations and several special Federal programs. The Social Security Administration developed and continues to improve basic statistics to measure trends and progress in workers' compensation and to evaluate the program, especially in relation to income-maintenance programs under the Social Security Act. A standardized set of State and national estimates of amounts expended for workers' compensation benefits--as well as national estimates on coverage, payroll, and costs to employers--are compiled and analyzed each year. This article includes an historical perspective on the estimates, dating from 1940.
Workers' compensation has become a focus of public attention in the 1970's to a degree unprecedented in its 70-year history. Federal legislation, two national study groups, a rush of State reform amendments, and congressional hearings and bills proposing Federal standards have all contributed to the ferment of inquiry about the relevance and adequacy of the present system of State workers' compensation. Among the questions raised are: Does the system cover all the workers that should be protected? Are the benefits provided adequate? And what are the cost implications to employers of the changing program? For many years, the Social Security Administration has published estimates of the number of workers covered, the benefits paid, and the costs of workers' compensation. This article provides benchmark data to bring coverage and benefit estimates up to date and analyzes statutory provisions measuring several aspects of benefit adequacy.
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