Here’s a selling point local employers can use to attract talent: You’re less likely to get hurt working in Louisiana than in almost any other state.
That’s because the state consistently ranks among the top for the fewest workplace injuries, thanks to employers’ focus on creating safe work environments. And with so few injuries, local businesses should also enjoy lower workers’ compensation insurance costs—right?
While it’s true costs are lower than 10 or 20 years ago, it’s a different story when comparing Louisiana to the rest of the nation, as Business Report details in a feature from the new issue. In spite of the stellar safety ratings, multiple studies show Louisiana employers pay higher workers’ compensation rates than their counterparts in other states.
Looking at premium rates, the Bayou State ranked tenth-highest in the nation in 2016, according to the Oregon Department of Consumer and Business Services, and a 2018 Workers Compensation Research Institute study, including 18 states, found Louisiana’s costs per claim were among the highest and fastest growing.
That, in fact, might explain why local businesses try so hard to avoid injuries.
“We have the lowest incident frequency rates, and we can attribute that to employers who emphasize safety because workers’ comp costs can be so high,” says Allen & Gooch attorney Patrick Robinson, a former director of the state Office of Workers’ Compensation and a former workers’ comp district judge.
So if injury rates aren’t the culprit, then what’s behind Louisiana’s high costs? Many point the finger at expensive medical treatment and an outdated fee schedule, which sets rates for healthcare provider reimbursements. Others blame longer claims duration driven by attorney involvement and a complex workers’ comp system. But the answer may be all of the above.
“Our problem is we’re paying a lot in medical costs, but not getting a return on that by getting people back to work quickly and economically,” Robinson says. “We’ve created a complicated system. We have employees who have to hire attorneys because the system is so complex. Then the other side has to hire an attorney.”