Report Backed By Insurance Industry Skews NC's Workers' Compensation Data, Could Hurt Workers And Taxpayers

RALEIGH, N.C., Feb. 7, 2011 /PRNewswire/ -- North Carolina's workers' compensation system delivers good benefits to injured workers, according to the NC Advocates for Justice (NCAJ), at a low cost to employers.

The NCAJ's source-based analysis comes in response to a flawed report issued by the Workers Compensation Research Institute (WCRI).  

"WCRI's report is an unfortunate example of insurance companies and corporations seeking government subsidies by shifting their expenses to taxpayers," said NCAJ CEO Dick Taylor. "WCRI is funded by insurance companies and big corporations, and routinely issues reports that support 'reforms' that will increase their contributors' profits."

In its latest report, WCRI claims the average payment per claim for injured workers in North Carolina is higher than in 15 other major states. That is misleading for a simple reason: in North Carolina, unlike other states, workers' compensation doesn't cover many injuries sustained in the normal work routine.  North Carolina has fewer claims, and they are for more severe injuries.  Naturally, our average payment per claim is higher.

The fair measure of workers' compensation costs in North Carolina is straightforward: Are employers' costs for workers' compensation insurance out of line with other states?

They aren't.  The cost of workers' compensation insurance in North Carolina is, and has been for years, at or near the national average. For example, four months ago a study by the highly regarded Oregon State Department of Consumer and Business Services reported that North Carolina ranks twenty-third in the nation in the average cost to employers of workers' compensation insurance.

We do even better in comparison with the states in WCRI's study.  Eight ( California, Illinois, Minnesota, New Jersey, Pennsylvania, Tennessee, Texas, Wisconsin) of the sixteen states in the WCRI report have higher costs to employers than North Carolina, and one ( Michigan) has identical costs. Each of these states, according to WCRI, pays lower benefits to its injured workers.  In other words, in contrast to the other WCRI states, North Carolina delivers good benefits to injured workers, at low cost to employers.

That may be part of the reason why Site Selection Magazine has ranked North Carolina in nine out of the last 10 years as the best place in the country to do business.

Right now, corporations and insurance companies are lobbying the NC General Assembly to cut benefits to injured workers. Under their proposal, even if a worker is injured on the job and continues to be totally disabled, his or her workers' compensation will end after 500 weeks.