The document outlines 10 key issues facing the workers' compensation industry: 1) the impact of the Affordable Care Act is still uncertain; 2) low wage growth may not cover rising medical costs; 3) the industry lags in technology usage; 4) long-term opioid addiction among claimants is a major problem; 5) the impact of legalized marijuana is unclear; 6) rising manufacturing jobs may increase injuries; 7) continued safety issues persist in some industries; 8) a growing mobile workforce is harder to monitor; 9) terrorism insurance protections will expire; 10) younger workers often lack skills or cannot pass background checks.

1. The Top 10 Issues Facing the Workers’
Compensation Industry

2. For most of the United
States,
workers’ compensation rates
are on the rise. This is
driven by high medical costs,
the low-interest-rate
environment and the general
unprofitability of the workers’
compensation industry.

3. But this is just one of the obstacles facing the workers’
comp industry. Here are the top ten issues facing the
industry:

4. 1.The Affordable Health Care Act (AHCA)
There has been much speculation
about the impact that the ACHA
will have on workers’ comp. Many
feel it will increase leakage from
group health to workers’ comp,
others feel it will have the opposite
effect. Though research shows
modest changes, it’s still too early
to determine the ACHA’s effect on
worker’s comp.

5. 2. Not Enough Premium Growth to Cover Costs
The average U.S. salary increases
for 2014 held steady at 3% for the
past two years in a row, but pay
rises still remained at about one
percentage point below pre-
recession levels. Low to moderate
pay wages hurt the workers’
compensation market.

6. 2. Not Enough Premium Growth to Cover Costs
If wages continue to stay low, soon
there will not be enough premium
growth to cover costs associated
with the medical component of the
claim dollar.

7. 3.Lack of Technology
The workers’ compensation
industry is lagging behind other
industries when it comes to the
use of technology. Experts believe
that the workers’ compensation
industry must start using
technology and align itself with the
rest of the health care system to
avoid rising costs.

8. 3.Lack of Technology
“Even now, today, the usual way is that
when you have a claim, you’ll go online
and file a report online or you’ll make a
phone call. Why couldn’t you take out
your smartphone, have a voice activated
app that could allow you to report directly
into your carrier’s system says Thomas
Lynch, founder of a management
consulting firm for workers’ comp.

9. 4. Prescription Pill Addiction
A big issue facing the industry is the
long-term use of opioids. “There are
probably more than 200,000 workers’
comp claimants who have been on a
opioids for more than 6 months. The
majority of those are addicted. Usually
these claimants don’t go back to work
and their claims continue, running up
employers’ costs, and taxpayers’ costs,
quite significantly.

10. 5. The legalization of Marijuana
Even though marijuana has been legalized
in 20 states for medical use, it’s still
considered an illegal substance under
federal law. The problem for the workers’
comp industry is that there’s no proof that
medical marijuana is effective. This is a
huge issue and what the industry is
buzzing about, even though there has
been no claim activity to date

11. 6. Manufacturing jobs
Thanks to falling domestic natural
gas prices, global manufacturing
jobs are on the rise in the U.S. As
new workers enter the
manufacturing industry, there is a
higher chance of work-related
injuries. Studies confirm that new
workers are more subject to injury
than experienced workers.

12. 7. Safety in the Workplace
While workplace safety has
improved over the years, there’re
still areas in certain industries
where accidents happen because
people are trying to cut corners.
OSHA is focusing on working with
the Justice Department and people
are being charged for doing things
that are willfully unsafe in the
workplace – where people are
getting killed.

13. 8. The Rise in Mobile Workforce
The mobile workforce has risen to 80% since 2005. This
presents a new issue to workers’ compensation insurers. “If
you consider that in 2013, 26% of all automobile crashes in
the U.S. involved the use of a cellphone that brings home
the idea that if you’re working in a building, the employer
can control a lot of things. But once you leave that building
and get into your own little car or your employer’s car and
you drive somewhere, that arm of control isn’t quite there
like it used to be,” says Lynch.

14. 9. The Expiration of Terrorism Risk Insurance
The Terrorism Risk Insurance
Program Reauthorization Act
will expire at the end of this
year. This this is essential to
the workers’ comp industry
because, they cannot tell
somebody their injury isn’t
covered because it resulted
from a terrorist attack.

15. 10. Workforce Demographics
Experts see the younger generation as a growing concern. “Their labor force
participation rates are down. Many of them are not even looking for work.
Many do not have job skills or can’t pass a criminal background check or a
drug test.” says chief economist Harry Shuford.