For most people in Colorado, workers’ compensation benefits are paid out to employees who become hurt on the job. For Denver employers, however, workers’ compensation benefits are the result of workers’ compensation insurance premiums. Employers must pay into an insurance system for their employees to be eligible for benefits should they have a work injury, and these premiums will be going up for the fourth year in a row. Though these figures don’t directly affect injured workers, they could influence changes in the workplace.
One of the reasons why premiums are increasing is because of the growing number of people claiming benefits in Colorado. If Colorado businesses did more to improve workplace safety, it is possible that the costs would not rise as much.
One of the biggest parts of the increase was the “loss costs.” Loss costs are calculated by taking the average amount of medical and lost wage payments a worker will need during time off for a work injury. This is a nationally calculated number that is set each year by the National Council on Compensation Insurance. Loss costs form an important part of the insurance premiums, and Colorado’s form half of the rate increase between 2013 and 2014.
The reason why these costs keep increasing is because more and more frequently injured workers are applying for workers’ compensation benefits and the amount paid out is also increasing. If employers worked to reduce the number or severity of accidents, perhaps loss costs would fall. And, if employers took on this project, it would create a safer workplace for all employees.
Source: Denver Business Journal, “Colorado workers’ comp rates will go up again in 2014,” Ed Sealover, Oct. 22, 2013