January 19, 2010

Older Workers and Comp: Low Risk and A Few Surprises

NCCI has issued its latest report (PDF) on the status of older workers in the comp system, with a particular focus on workers 65 and up. If nothing else, the study reinforces the notion that older workers are safety conscious and a relative bargain. For employers worried about workers comp costs, older workers are not a significant problem.

In 1988 eleven percent of workers 65+ participated in the workforce; now 17 percent of these older workers are still working. That percentage will likely increase as the long-term effects of the financial collapse continue to resonate through the damaged economy. Some people continue working because they want to; many more continue because they have no choice.

Injury Prone?
The frequency rate for older workers varies by occupation: in construction, older workers appear to be safer than younger workers - they are injured at a 4 percent rate, compared to 12 percent for their younger colleagues. The results are flipped in retail/sales: older workers are injured at a 23 percent rate, compared to 15 percent for all others.

As you might expect, the leading cause of injuries for 65+ workers are slips, falls and trips - 47 percent of all injuries for this cohort. (Younger workers suffer these injuries at a 24 percent rate). For strains and sprains - the overall leading cost-driver for workers comp - the results are reversed: the frequency for older workers is 23 percent, compared to a whopping 38 percent for all others.

It does take longer for older workers to recover from injuries: they have a median days-away-from-work rate of 16, compared to 12 days for workers in the 55 to 64 group and 10 days for workers 45-54. Despite this higher rate, overall indemnity costs are lower. Why? Because older workers make substantially less on average than younger ones. Wages peak in the mid-50s and then fall off dramatically after age 65, down to the same level as the entry level 20 to 24 group. So much for the notion of paying for experience!

The only red flags in the study involve the retail trade and service/hospitality industries, where older workers are showing higher-than-average costs for comp. These jobs probably offer ample opportunity for slips, trips and falls, the number one cause of injuries for these workers, .

It will be fascinating to watch NCCI's study evolve over the next decade. The percentage of workforce participation for the 65+ group is going to increase steadily. With this growth, the risks will be enhanced. There is likely to be an upward trend in both frequency and severity, but perhaps not as much as feared. Certainly, the NCCI study reinforces the argument that older workers are safe, reliable and motivated. There is no reason to discriminate against them. If anything, you could make a good case for preferring an older worker to a younger one. Fodder for further thought, indeed.

NOTE: Special thanks to reader Soon Yong Choi for spotting an error in an earlier version of this post (see comments). Given my checkered track record with numbers, I can only hope that Choi and similarly adept readers continue to cast a critical eye on any of my postings where statistics are involved.



I am working as a consultant on the case of a 68 year old owner operator truck driver. He is on Social Security and Medicare.

He has a number of pre-existing conditions (in his jurisdiction) the employer (himself) takes his employees as he finds them (he buy his own injury) He has an un-witness accident - sends himself to his doctor. As the employer he does not want a second medical opinion or an independent medical examination. He needs shoulder surgery. He re-injured the knee he settled 2 month prior and now has complains of low back pain. He needs shoulder surgery but cannot afford to stop work. He is demanding a settlement. Enough to cover his operating costs while he recovers from shoulder surgery (25K)

His WC carrier will not settle with him (MSA issues aside) because he could have another compensible event the day after the settlement is approved. He plans on hiring a driver for his truck. The money he pays his driver becomes the bases for his wage loss claim. Comp pays for part of the cost of him hiring a driver.

Many older workers can no longer afford to retire, they have more health issues than younger workers and their pre-existing health issues can turn into claims for wc benefits.

Returning the older worker to work often requires some from of job modification.

Managing these claims can present the adjuster with issues that require significant time and involve complex legal issues which may drive up legal costs. Most comp statutes were not written with this population in mind. The adjuster may find limited caselaw written to cover these issues.

Employer using a TPA to administer their claims may benefit from hiring a consultant to monitor the TPA's handling of these complex claims.

Larger employer should consider wellness programs as a way to improve the overall health of the over 65 worker as a way to reduce the negative affects of pre-existing health issues. This approach may not be possible for smaller employer.

Gary W. Kern, BA, ARM, CWCP

Thanks for the info. One correction for "In 1988 workers 65+ comprised 11 percent of the workforce; they are now up to 17 percent." Although Exhibit 2 of the report is not very clear, "11% of 65+ in 1988 increased to 17%" refers to the participation rate, not the percentage of labor force. What it is saying is: "in 1988, 11% of those who were 65 years old or older were working, and now 17% of that age group work."

According to Exhibit 1, those 65+ account for less than 5% of the workforce in 2007.


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This page contains a single entry by Jon Coppelman published on January 19, 2010 11:51 AM.

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