NCCI Study Reports Increase in Temporary Total Disability Indemnity Benefits

Posted Date: February 15, 2011

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Workers Compensation Temporary Total Disability Indemnity Benefit Duration 2010 Update

After a period of moderation, NCCI is now seeing an increase in the average duration of payments for Temporary Total Disability (TTD) indemnity benefits. This increase coincides with the onset of the recession in late 2007.

Countrywide, our estimate of ultimate mean duration of TTD indemnity benefits has risen from about 123 days for injuries that occurred in 2006 to a forecasted 141 days for injuries that occurred in 2009. Unemployment rose nationally from 4.6% to 8.7% during this same period.

TTD indemnity mean duration varies significantly by state. Most states, however, do follow the countrywide pattern of increasing duration in the most recent one to three years. For example, Florida had a steep decline in duration from 2003 to 2007, but duration increased in 2008 and 2009. Likewise, in Tennessee, where duration increased moderately between 1998 and 2005, we see sharper increases in duration for all accident years since 2005.

Data for this study is claims with injury dates from 1996 to the first six months of 2009 for which TTD indemnity benefits have been paid. This study adds 18 months of experience beyond our prior TTD duration study and includes some recession-impacted claims.

Duration of TTD benefits is determined by adding the number of distinct compensated days reported on indemnity payment transactions. The data was edited for reasonableness, removing less than 1% of the claims, as discussed in the methodology section in Appendix I.

Lump sum settlements have been included where the compensated days were listed as part of the payment. If a settlement transaction only included a single covered day, then only that one day was included as part of the claim duration.

Temporary Partial Disability (TPD) benefits, which supplement a worker's wages while on light duty or on a reduced schedule, were not included in this study.