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Louisiana Workers’ Compensation Insurance Costs Growing at State Agencies

While the number of claims filed by Louisiana state employees has seen a healthy drop over the past eight years, the costs of the claims filed has skyrocketed. The office of the Legislative Auditor has been reviewing claims and their respective costs for state employees ranging from 2006 to 2013, and the numbers are shocking.

What the Audit Uncovered

After the audit of 2006 to 2013 budget years was completed, it was revealed that the number of claims decreased by 30 percent. The cost of those claims, however, has jumped from $44.3 million per year (as of 2006) to $66.2 million in 2013 – that is more than a 49 percent increase.
Reasons Why There is an Increase in Costs for Louisiana Workers’ Compensation Insurance

Unlike other state regulations, Louisiana rules regarding their workers’ compensation claims are not so definitive. Some other reasons there has been an increase in the cost of these claims includes:

  • There was an increase in the amount of time the injured workers took off from work.
  • An outdated fee schedule for reimbursements was used for medical providers – paying out higher reimbursement rates than Medicare.
  • Dispute resolutions were lengthy and costly.
  • There was a lack of a prescription drug formulary. Louisiana workers’ compensation insurance programs do not have the same prescription drug limitations that average health insurance plans do – which control costs.
  • Unlimited temporary total disability benefits were distributed.

The auditor’s office has made a list of recommendations to help lower the cost of Louisiana workers’ compensation insurance claims. These policies are already used by private businesses in the state and now the auditor is encouraging city and state agencies to do the same for their staff. Also, the auditor’s office is now suggesting that employers perform a required drug test any time an employee is injured on the job. This is because state law does not allow workers’ compensation benefits to an employee that was intoxicated at the time of injury.

Understanding the restrictions and rules of workers’ compensation insurance is complex. Whether you are a state-run business or private business owner, you should speak to a local insurance broker regarding your workers’ compensation insurance coverage.

Call The Nowell Agency Inc. at our Louisiana Call Center (888) 675-1842 to learn more about how you can lower the cost of your workers’ compensation insurance claims. You can also request a quote for coverage online.


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