Mo. Employers Paying Less to Cover Injured Workers

Two years after lawmakers tightened eligibility for benefits to injured workers, the insurance premiums businesses must pay to care for injured workers have dropped to 1994 levels.

In 2005, Gov. Matt Blunt and the Republican-led Legislature limited what kinds of injuries are eligible for benefits through the state workers’ compensation system. Those changes included requiring workers prove that their jobs were the primary cause of their injury. The law also cut benefits when workers have drugs or alcohol in their system.

State law requires most employers to have workers’ compensation insurance. Data from the state insurance department show employer payments for workers’ compensation insurance have dropped almost 3 percent from the start of 2007 to the end of April. Overall, rates are less than 1 percent lower than in 1994.

Although workers’ compensation insurance premiums climbed for four years before Blunt took office, they dropped each year from 1995-2000.

Neither insurers nor government officials who oversee the workers’ compensation system said that the most recent drop in rates can be attributed solely to the 2005 changes.

Brent Butler, the director of government affairs for the Missouri Insurance Coalition, said Monday there are fewer workers compensation claims being made, which has allowed insurers to drop premiums.

The changes to the system have also prompted more insurance companies to seek out Missouri employers.

“More companies are starting to build market share and others are trying to come in,” Butler said. “More competition is a good thing, it brings rates down.”

In 2004, insurance companies collected $964 million in premiums and paid out $594 million in claims. In 2006, premiums increased by $39 million to more than $1 billion. Claims fell by $52 million to $542 million.

But the drop in payouts comes on the heals of falling rates for other types of insurance, which makes it impossible to peg the changes to the workers’ compensation system for business’ savings, said a spokeswoman for the Missouri Department of Insurance.

Spokeswoman Emily Kampeter told the Southeast Missourian that the department “can’t say the changes have had a direct effect.”

The workers’ compensation system was created in the 1925 to help workers injured on the job and avoid lawsuits.

There were 130,000 injuries reported to the state in 2006 _ only about one-third of which resulted in missed work days, said a spokeswoman for the Department of Labor.

Labor groups, which contested the 2005 changes, say the reduction in workers’ compensation claims means injured workers are finding it harder to get health care for their injuries.

Herb Johnson, the secretary-treasurer for the Missouri AFL-CIO, told the newspaper that employers and insurers have hidden behind alleged instances of workers seeking payouts for non-work injuries as a reason to cut down on benefits for on-the-job injuries.

In 1993, the Legislature as part of another overall of the workers’ compensation system created the Missouri Employers Mutual Insurance Co. to make it easier for employers to get affordable workers’ compensation insurance.

Steve Millikan, the vice president of public affairs for the insurance company, said several factors, including the 2005 changes to the workers’ compensation system, are driving down premiums.

Millikan said his company cut rates 5 percent in 2006 in part because it expected lower costs. He said overall rates also are falling because there are more insurers now, and he expects them to continue dropping for the next several years.