Safety and OSHA News

Baby boomers not to blame for higher workers’ comp costs

You’ve probably seen all sorts of articles predicting that as baby boomers reach retirement age that will only increase costs for employers, including workers’ comp insurance. Well, that’s not exactly the case, it turns out.

A report (PDF) by the National Council on Compensation Insurance (NCCI) says an aging workforce may have a less negative impact on comp costs than originally thought.

The old theory went something like this: Baby boomers (those currently 47-66 years old) are postponing retirement. That’s created an older workforce which in turn leads to higher workers’ comp costs because older workers take longer to heal after an injury.

Here’s the reality, according to NCCI: It’s not really about baby boomers. Older workers do tend to have higher comp costs, as long as you define “older” as people above age 34. But costs don’t increase as they reach their 40s, 50s and 60s. All groups aged 35 to 64 have similar costs per worker. Employees 20 to 24 have markedly lower costs, and those 25 to 34 are in the middle.

Another conventional wisdom struck down by the report: Younger workers have much higher injury rates. Now, that’s no longer the case.

One difference in costs for the over and under 35 groups is in the severity of injuries. Older workers tend to have more rotator cuff and knee injuries while younger employees have more back and ankle sprains. Severity for older workers is roughly 50% higher than for their younger counterparts.

Another reason why costs are higher for the over-35 set: They make more money. Older workers received 26% more in average temporary benefits per day than those younger than 35.

What do you think about this study? Let us know in the comments below.

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  1. […] work-related injuries to his left shoulder and right hand. After surgery in July 2009 to repair a torn rotator cuff in his left shoulder, he received workers’ compensation benefits for temporary […]

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