The Aging Workforce and Workers' Compensation

Topics: Workers' Compensation

People are living longer than ever these days. The World Health Organization (WHO) reports that by the year 2050, the population of those aged 60 years and older will total two billion. 2015, by comparison, had an aging population of 900 million. Experts even estimate that many of the babies born in 2012 who live in wealthier countries should live to see their one-hundredth birthday.

These additional years mean people today are enjoying a variety of opportunities the generations before them may have missed. This includes spending more time on their passions and pursuing their goals, possibly even continuing their education or working past retirement age.

The Benefits of Working Past Retirement Age

aging worker in a warehouse

The Pew Research Center reports that in 2018, 29% of baby boomers aged 65 to 72 years old were still employed or were looking for work. This is a newer trend, outpacing the labor market engagement of both the silent generation and the greatest generation when they were the same age.

Why are people working well into their golden years? Some choose to maintain their jobs for financial reasons; studies show that more than half of the workforce in the United States have less than $25,000 in their savings accounts at retirement age, excluding any pensions or property. Staying employed for as long as possible is a necessity for these individuals, so they can continue saving for when they can no longer physically work anymore.

Working past retirement age provides health benefits, too. Working longer keeps people more active and socially connected to others. Staying on the job can also keep seniors mentally challenged, which can be key in preventing Alzheimer’s disease or dementia. Some individuals simply aren’t ready to give up the sense of accomplishment they feel from completing a task or project; continuing to work provides meaning to their lives and gives their emotional health a much-needed boost.

The Impact of the Aging Workforce on Workers’ Compensation

The U.S. Census Bureau states that by the year 2030, all baby boomers will be older than age 65, expanding the size of the older population so that one in every five residents will be of retirement age. This means that for the first time in history, the older generation will outnumber children in the country.

The years ahead will represent a transitional period for the U.S. workforce. What impact does working past retirement age have on workers’ compensation rates? AmTrust Financial’s Matt Zender, Senior Vice President of Workers’ Compensation Strategy, says “As the proportion shifts towards older workers, evidenced by a near doubling of the percentage of workers aged 55-64 and a near tripling of workers 65 and older during the period between 1996 and 2026, we need to remain diligent as an industry and as employers to meet the changing needs of this demographic.”

A couple of things employers should keep in mind include:

The costs of workers’ compensation claims increase with age

Physical changes that come with aging can affect one’s health – changes that are completely unrelated to activities or injuries that occur within the workplace. Older workers tend to have more pre-existing conditions than their younger counterparts experience, such as joint pain from arthritis, decreased range of motion and loss of muscle strength and flexibility. These conditions can make the bending, lifting, carrying, pushing, etc., that are part of daily duties not only more difficult, but easier for an injury to occur.

These pre-existing conditions may also increase the likelihood that the injury will be more severe for the older employee. This results in higher medical costs, as well as higher costs for workers’ compensation claims. It could be valuable for employers to consider moving older employees into positions that put them at less risk for suffering an injury, such as mentoring younger employees or consulting on certain projects and tasks.

Until 2017, incidence rates for older workers was the lowest of all age groups

A recent research report on workplace demographics from NCCI stated that until the year 2017, older workers historically had the lowest frequency of incidences and injuries on the job. The incidence rates for workers over age 65 are still the lowest of all age groups from 2006 through 2017. Older workers tend to be more cautious and familiar with all aspects of their job duties, which can help lead to fewer workplace injuries for their age group.

The types of injuries among age groups tend to differ, too. Older workers are more likely to be injured from a slip, trip or fall, while their younger counterparts suffer more injuries from contact with objects or equipment.

Older workers are slower to return to work following an injury

An older employee who has suffered an injury may take longer to recover and therefore, take longer to return to the workforce. The pre-existing conditions mentioned above could limit the worker’s ability to take part in traditional medical treatments, such as surgery or physical therapy. The slower an employee is to heal, the more likely permanent impairment or chronic conditions could arise.

The time away from the job can be decreased if an employer has implemented a return-to-work program, which allows employees to ease back into the workplace while also helping to keep their workers’ compensation costs lower. Modifying the duties of injured employees allows them to get back on the job while they continue to recover, easing their financial stress and keeping their skillsets sharp.

Workers’ Compensation Coverage from AmTrust Financial

AmTrust Financial is a leader in workers’ compensation, working with small and mid-sized businesses to design the specific packages they need to comply and succeed. For more information about our small business insurance solutions, please contact us today.

This material is for informational purposes only and is not legal or business advice. Neither AmTrust Financial Services, Inc. nor any of its subsidiaries or affiliates represents or warrants that the information contained herein is appropriate or suitable for any specific business or legal purpose. Readers seeking resolution of specific questions should consult their business and/or legal advisors. Coverages may vary by location. Contact your local RSM for more information.

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