Workers’ Compensation: Coverage, Benefits, and Costs, 1979

Workers’ compensation is the oldest social insurance program in the United States. The first law was passed in 1908 to provide cash and medical benefits for workrelated disability and death. This program now consists of 50 independent State operations and several Federal programs. The experience under workers’ compensation is of considerable importance to the Social Security Administration because of the relationship between workers’ compensation and the Old-Age, Survivors, and Disability Insurance (OASDI) program. Since 1965, Social Security Disability Insurance benefits and workers’ compensation payments have been integrated. Other types of benefits, such as payments to survivors, are paid by both systems with no attempt at coordination. Further, some workers who become disabled on the job do not receive income support from either program because of coverage exclusions, eligibility conditions, maximum benefit limits, or other restrictions. In 1979, State and Federal workers’ compensation programs paid $11.9 billion in benefits-22 percent above the amount paid in 1978. This percentage increase was exceeded only once before, in 1973. Workers’ compensation protected approximately 78.6 million workers, about 7 million fewer than the number of wage and salary workers covered under the OASDI program. This difference reflects the greater extent of coverage under Social Security of farm workers, workers in small firms, and workers in casual employment. The cost to employers of workers’ compensation was $20.0 billion. Costs include expenditures for benefits and the monies needed to operate the insurance programs and the regulatory agencies. The almost $3billion increase in costs in 1979 represented a 17-percent rise over the 1978 level. Although this percentage increase was substantial, it was not as great as the percentage changes in 1976 (24 percent), 1977 (27 percent), and 1978 (21 percent).