Key Insights

  • Average duration of temporary disability benefits increases with age, although the rate of increase slows down after 40.
  • The Construction and Utilities sector has the longest average duration of all the economic sectors.
  • Among the most common injuries seen in workers compensation, shoulder claims have the longest average duration.

Introduction

The majority of lost-time claims receive temporary disability benefits at some point. Given their ubiquity, it’s important to develop a thorough understanding of these benefits. This brief is the first in a series on workers compensation temporary disability benefits.

This brief presents the following as they relate to temporary disability duration:

  • An examination of key claimant and injury characteristics in data reported to NCCI, including age, economic sector, body system, and medical condition.
  • A series of empirical distributions that aid in identifying differences across the claim characteristics and provides industry benchmarks.

What’s New

From 2010 to 2013, NCCI published a series of briefs on temporary total disability benefit duration. This 2023 update looks at all temporary disability (TD) benefits which includes both temporary total disability (TTD) and temporary partial disability (TPD) benefits.

This brief utilizes data as reported in NCCI’s Indemnity Data Call (IDC), which has more detailed benefit payment information than previously available data sources, but is currently limited in claim maturity. As such, this study evaluates TD duration as of 12 months. For context, at the 12-month maturity, 96.7% of all TD claims have gone more than seven days without receiving a benefit payment, indicating that a significant share of TD claimants have returned to work or are receiving permanent disability benefits within 12 months of the accident date.

Previous duration studies distinguished between “pure TTD”1 claims and “healing period”2 claims, while this study aggregates both claim types. As additional data is reported, and claims can be evaluated at later maturities, this framework will be updated to differentiate between these two types of claims.

Additional data will also make it possible to monitor trends by accident year. Note that the study period coincides with the COVID-19 pandemic (refer to Appendix A for more information). As this analysis is extended into subsequent years, it will become increasingly evident how the pandemic influenced the results presented in this brief.

Claim Example

The level of claim detail captured by data reported in the IDC is illustrated below. Duration is defined as the number of days TD benefits were paid, excluding any payment gaps. In the example shown in Exhibit 1, this injured worker had a compensable accident on January 1. As of the 12-month maturity, the claimant received 120 days’ worth of TD benefits over the following two periods:

  • $50 per day between January 2 and April 10 for a total of 100 days
  • $45 per day between May 1 and May 20 for a total of 20 days

This claim was active for a total of 140 days despite only receiving 120 days of TD benefit payments, the difference being the gap in benefit payments from April 11 to April 30.

Exhibit 1: Illustration of Benefit Duration

Overall TD Duration Distribution

Exhibit 2 below displays the distribution for all TD benefit durations at the 12-month maturity. Refer to Appendix A for more information on the claims included in this study.

  • The average duration is 94 days, indicated by the red diamond.
  • The median duration is 54 days, indicated by the black dot. That means half the claims have durations of 54 days or less. As the available data matures, the average duration could rise for later maturities, while the median duration is likely to remain more stable. The average is greater than the median when there are long-duration claims that pull the average upward, creating a right-skewed distribution.
  • The 25th and 75th percentiles are 18 and 133 days, respectively, indicated by the line endpoints. The 25th percentile indicates that 1 out of 4 claims have durations of 18 days or less. Similarly, the 75th percentile indicates that 3 out of 4 claims have durations of 133 days or less.

Exhibit 2: Representation of Distribution Statistics

The remainder of this study will present the TD duration distributions and claim counts by various claim characteristics, using the same schema established above.

State

The average duration by jurisdiction can be compared to the all-state average of 94 days, as indicated by the dotted vertical line. The average duration varies widely across states, from 71 days in IA to 149 days in LA. Each state’s unique workers compensation statutes, e.g., waiting periods and retroactive periods, play a role in shaping its TD duration distribution. More information on TD benefit provisions by jurisdiction can be found in NCCI’s Annual Statistical Bulletin, Exhibit 7.

Exhibit 3: Duration by State

Age Group

The average duration increases by age group, from 67 days for injured workers 29 and younger to 113 days for those 65 or older. After age 40, the increase in duration is less significant. Note that the average duration for the “40 to 49” and “65 and older” age groups are only 11 days apart.

Exhibit 4: Duration by Age Group

Economic Sector

The Construction and Utilities sector has the longest average and median duration of 116 days and 74 days, respectively. The other sectors all have relatively similar distributions, with means ranging from 85 to 100 days and medians ranging from 46 to 57 days.

Exhibit 5: Duration by Economic Sector