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September 21, 2020

Annual Minnesota Workers’ Compensation System Report released

The number of paid workers' compensation claims fell 51% relative to the number of full-time-equivalent (FTE) employees from 1998 to 2018, according to the 2018 Minnesota Workers’ Compensation System Report, just released by the Department of Labor and Industry.

Significant findings

  • The number of paid claims fell from 8.4 per 100 FTE employees in 1998 to 4.1 in 2018.

  • Adjusted for average wage growth, average medical benefits per claim were 67% higher in 2017 than in 1998; indemnity benefits per claim were 51% higher. Medical and indemnity benefits per claim have shown little net change relative to average wages since 2003.

  • Despite higher benefits per claim since 1998, costs are down relative payroll because of the falling claim rate. Compared to 1998, indemnity benefits per $100 of payroll were 29% lower in 2018 and medical benefits were 28% lower.

  • The cost of the workers' compensation system for 2018 amounted to $1.02 per $100 of payroll. In Minnesota and elsewhere, this cost follows a multi-year pricing cycle. However, comparable points in the cycle for Minnesota indicate a long-term downward trend averaging 2.1% a year.

  • In 2018, on a current-payment basis, medical benefits accounted for an estimated 35% of total system cost, followed by insurer expenses at 31% and indemnity benefits other than vocational rehabilitation at 29%.

  • The percentage of indemnity benefit claimants receiving vocational rehabilitation services rose from 16% in 1998 to 24% in 2018.

  • The percentage of indemnity claims with a dispute of any type rose from 16% in 1998 to 21% in 2008, but has been stable since then.

This report, part of an annual series, presents data from 1998 through 2018 about Minnesota's workers' compensation system. The purpose of the report is to describe the current status and direction of the system and to offer explanations, where possible, for recent developments. The report is available online and copies may also be obtained by calling 651-284-5030 or 800-342-5354.