Why doesn’t every work-related injury become an accepted workers’ compensation claim? – Part 3: Attrition by Barriers and Suppression

 

Along the pathway from work-related injury to accepted workers’ compensation claims are three distinct attrition points. Last post we examined the intentional design elements eliminating work-related injuries of about 15% (average) of the employed labour force in the US, Australia, and Canada from becoming accepted workers’ compensation claims.

The second attrition point marks the greatest departures from the pathway with estimates of 20-90% of work-related injuries that could become accepted workers compensation claims.

This claim initiation stage begins when the workers’ compensation authority/agent/ administrator receives a report of or claim for a work-related injury from an eligible worker and ends with a complete claim for consideration and decision.  Barriers that prevent claim reporting or supress eligible workers from initiating or fully completing an application for workers’ compensation entitlements are the focus of this post. 

Barriers to claim initiation: Departure Categories

Work-related injuries among workers within the scope of workers’ compensation coverage must be reported to the insurer (WC insurer/agent/administrator) with sufficient detail to be considered for acceptance. That detail typically includes a specific application for benefits from the worker either directly or through the employer.

The departures from the pathway can be clustered around three barrier categories:

• Worker-centric barriers
• Employer-centric barriers
• System-centric barriers

Worker and employer-centric barriers to eventual claim acceptance are proximal causes or impediments, not root causes. 

Worker-Centric barriers

Workers suffer work-related harms but may lack knowledge (or accurate information) concerning their rights and entitlements under workers compensation laws.

A recent Atticus survey in the US (https://www.atticus.com/advice/workers-compensation/workers-comp-knowledge-report ) found nearly 1 in 2 Americans (49%) believe that filing a workers' comp claim could put their job at risk.

The percentage who believes workers' compensation helps workers varies by generation.  Baby boomers: 58%

• Gen X: 42%
• Millennials: 38%
• Gen Z: 49%

A meta-analysis of underreporting studies (Kyung et al. BMC Public Health (2023) 23:558 https://doi.org/10.1186/s12889-023-15487-0) found 20–91% of workers did not report their injuries or illnesses to management or workers’ compensation programs.  Higher severity injuries were more likely to be reported but workers reporting more than three injuries in the past year were less likely to report injuries. 

Several studies in the analysis found a good psychosocial work environment including supervisor support, coworker support, safety training, and safety climate was positively associated with higher injury or illness reporting.

Consistent with other studies, this analysis lists the following reasons for underreporting:  Fear or concern,

• Cumbersome time and effort in the reporting process,
• Lack of knowledge regarding reporting,
• Perceptions of injuries as not severe or part of the job,
• Distrust of reporting consequences.

These proximal causes suppressing claim reporting or filing may mask root issues in the workplace.  Past experiences, workplace or occupational culture can play a role.  For example, when speaking with psychiatric nurses about violent acts causing injuries, many will relate these as common yet rarely reported events.  As more than nurse told me, “It’s just part of the job.”

Most workers are unaware an aggravation of pre-existing condition (such as osteoarthritis) following a work-related injury is compensable in most jurisdictions. Certain cases of work-related injury carry a stigma (mental injury, sexual assault) potentially covered by workers’ compensation but lack of knowledge regarding the protections and services offered inhibit reporting and filing a workers’ compensation claim.  Workers report a distrust or concern about the information they must provide becoming available to their employer and coworkers.    

The under-reporting of work-related injuries is more common where there is no time lost from work and no medical expenses beyond employer-provided first aid.  Many such cases are reportable under OH&S or workers’ compensation rules (or both).  With no lost wages or medical expenses, there may be no need to determine work-relatedness of the injury and entitlement to indemnity or medical aid benefits; consequently, workers may feel no need to report or file a workers’ compensation claim.   

Employer-Centric Barriers

An employer may act in a way that prevents or impedes a worker from filing a legitimate workers’ compensation claim.  Regardless of motivation or root cause, employer-centric barriers suppress claims.  I want to distinguish three forms of suppression based on intent and mechanism:

1. Active claim suppression
2. Passive claim suppression
3. De facto or functional claim suppression

1. Active claim suppression

This category involves deliberate, overt actions by the employer with the purpose of preventing an individual worker from claiming benefits to which they are entitled. Typical examples cited in research and policy reviews include direct actions by the employer such as:

• discouraging or dissuading the worker from filing,
• threatening job loss or other reprisal,
• refusing or failing to report the incident despite being aware it is reportable.

These employer-centric actions are carried out with intent and are almost universally prohibited by workers’ compensation legislation.   Leaving aside the motivation for creating these barriers, detection relies heavily on complaints and active auditing or monitoring by workers’ compensation authorities. 

2. Passive (or indirect) claim suppression

Less obvious actions (or inactions) can have a similar effect.   The intent is the same but frequently obscured by more benign actions or indirect incentives.  Examples include:

• offering “claim-free” bonuses or safety incentives that implicitly pressure workers not to report,
• suggesting the company is in a precarious situation inferring it “cannot afford” claims,
• establishing a workplace culture that trivializes injuries or discourages reporting through social or organizational norms.

The suppression is still intentional, but the signals are less direct and often intended at broader audiences rather than particular employees or individual claims. 

Firms have a legitimate, positive motivation for encouraging safety and communicating the financial health of the enterprise can encourage improved efficiency.  Where the intent is to discourage filing or completing a workers’ compensation claim, the actions are passive suppression. 

Failing to counter established workplace or occupational cultures that trivialize work-related injury is also a form of passive claim suppression.  Supervisors modeling non-reporting of their own work-related injuries and managers rewarding workers that muddle through despite harms contribute to this category of claim suppression. 

Detection of passive claim detection is more difficult, often relying on audits, analytics, whistleblowers, and incident investigations rather than reacting to individual complaints of claim suppression.  A level of plausible deniability may account for lower reported prosecutions or penalties for this form of claim suppression.

3. Functional or de facto claim suppression (no intent)

The previous categories share an inherent intent to suppress claims.  Functional or de facto claim suppression has the same suppressive effect but lacks the intent to block the pathway to an accepted workers’ compensation claim.

Common causes include:

• lack of employer knowledge about reporting requirements,
• administrative errors or misunderstanding of obligations,
• offering paid leave, vacation days, or “keeping the worker on full pay” as a well-intentioned alternative,
• informal arrangements to “see how it goes” instead of filing a claim.

These behaviours may come from positive motives (e.g., wanting to maintain wages for low-income workers) or from simple ignorance of workers’ compensation laws, but they still result in a non-filed claim. 

Detection often relies on investigations following serious injury, but many work-related harms go undetected.  Newly established and smaller firms are less likely to have a full understanding of workers’ compensation or pay attention to general educational material until a serious work-relate harm occurs. 

System-centric Barriers

The observed consequence of worker-centric and employer-centric barriers are the departures of otherwise eligible workers’ compensation claims from the pathway to claim acceptance.  The proximal causes of the attrition (fear, lack of knowledge, availability of alternatives, employer action or inactions, etc.) often have root causes in the workers’ compensation systems themselves. 

 

Workers’ compensation legislators and regulators must ensure the integrity and sustainability of their schemes.  Setting filing requirements, defining procedures, providing practice directives, creating rules for calculating compensation, assigning premium or assessment rates are legitimate and necessary components to proper oversight and administration. Ensuring there are enough resources, adequate systems, and proper training are all part of administrative responsibilities.

 

The necessary policies, procedures, and practice directives together with actual or perceived performance contribute to the root cause of the barriers noted above.  Here are a few examples: 

Experience rating/experience rate modification:  Financial sustainability of workers’ compensation systems is essential and providing incentives toward improved safety are foundational to workers’ compensation.  Premium rate modifications based on claim counts or costs can provide both sticks and carrots towards this end. Many commentators suggest experience rating may incentivize claim suppression by employers.  Aggressive experience rating systems or complicated ones that are not well understood may be at the root cause motivating some active and passive claim suppression. [See Paul Petrie, Restoring The Balance: A Worker-centred Approach to Workers' Compensation Policy, 2018 and his addendum Claim Suppression: The Elephant in the Workplace, 2022].

Onus and Standard of Proof:  I’ve encountered many workers who presume a certain injury will not be covered or will require them to provide a lot of evidence at both financial and emotional costs.  Workers’ compensation systems have varying evidentiary requirements; those with higher standards of proof and more adversarial approaches or greater onus on the worker may discourage claim filing to a greater extent than others.

 

Delays:  Claims take time to consider.  If the delay between claim filing and payment is lengthy or perceived to be lengthy, many workers avoid the process altogether particularly if reasonable alternatives are available.  Employers may offer the use of earned vacation or sick leave with no or low barriers, providing full wages on the regular payment schedule.  Where there are actual or perceived delays in determining claim acceptance and payment, there is likely a greater degree of underreporting or claim filing.     

 

Waiting periods:  Where the expected duration of absence from work is relatively short, the presence of a waiting period may be a significant disincentive to claiming, particularly if there are available alternatives.  If medical costs are absent, minimal or externalized, there is little incentive for an injured worker to report or file a claim that will not result in compensation.  Claims that extend beyond the retroactive period (typically two to  four weeks of work absence) and are reimbursed for the waiting period are more likely to be reported.   

 

Compensation rate:  Most compensation rates in the US are around two-thirds of average earnings (tax free).  In Canada, the rates vary from 75-90% of net (spendable) earnings.  In Australia, initial compensation levels vary between 80-100% but may fall as low as 65% after a defined period.  Workers’ compensation rates are generally higher than most group and private short-term disability insurance, unemployment insurance and other social insurance alternatives; sick-leave and vacation entitlements (if available) are likely to provide greater cash payments than workers’ compensation rates, creating an  an incentive to not file a workers’ compensation claim.

 

Denial rates:  Actual or perceived denial rates for specific injuries may be at the root of a worker’s decision to not file a claim.  Mental injures are a good example.   Many jurisdictions limit the acceptance of mental injury cases creating a general perception that claims will be denied despite a specific jurisdiction’s acceptance of mental injury claims. More generally, if denial rates are high or perceived to be high, many workers may not bother to report the injury of file a claim.  Many workers I speak with gain perceptions from social media reports produced by disability insurance advocate or stories from other than their home workers’ compensation jurisdiction, often erroneously attributing the denial rate to their own workers’ compensation jurisdiction.

 

Exclusions and exemptions:  In jurisdictions where there are many exclusions and exemptions, the ambiguity inherent in the system may discourage claim filing.  In enterprises where some workers are covered and others are not, that ambiguity may result in low claim filing among those that are in fact covered.

 

Procedures:  Most jurisdictions have filing time requirements.  Many have specific forms that must be completed.  Short filing windows, complex forms and multi-step procedures create a “hassle factor” that may be the basis for non-filing of workers’ compensation claims.   

 

Non-standard work coverage:  Ambiguity around coverage for moonlighting or second/third job earnings, gig employment may discourage reporting and claiming.   

 

Privacy/confidentiality:  For undocumented workers and many of those in precarious employment, filing a claim may be exposing information that may or may not be protected from other authorities. The lack of clarity about the confidentiality and consequences of claiming may deter work-related injury reporting and claiming.

 

Third party/multi-jurisdiction claims:  Workers may have a right to claim workers’ compensation benefits in more than one jurisdiction or pursue an action against a third party.  The legal requirement to determine jurisdiction or elect which jurisdiction to pursue may be onerous and time consuming particularly for shorter duration and lower severity and may lead to non-filing for shorter duration, lower severity claims. 

 

 

Workers’ compensation authorities and insurers do take actions to mitigate many of these and other issues that create or contribute to barriers.  Simplified forms, claim filing by phone, expedited decision making, general education and community outreach are effective strategies evident in many jurisdictions.

 

Prevalence of not reporting work-related injury/filing workers’ compensation claims

Collectively, the barriers outlined result in work-related injuries to workers within the scope of coverage departing from the pathway to accepted workers’ compensation claim. 

Most studies focus on underreporting of work injuries or under-claiming for losses caused by the work-related harm.  Mixed method studies may rely on worker interview or survey responses to confirm the frequency of reportable or compensable injuries and recorded claims data to determine the prevalence of not reporting behaviour.  Studies vary widely in terms of occupation, industry, employer size, nature of injury and severity resulting disability.

Caution in interpreting study results and generalizing trends is important. The lack of knowledge among workers and employers about workers’ compensation may contribute to ambiguous results.  For example, workers may report their employer paid them rather than receiving payment from workers’ compensation not realizing the employer provided income continuity and was reimbursed by workers’ compensation for most or all the wages paid. 

A RAND study found underreporting of injuries was especially pronounced among workers who could receive medical treatment from federally qualified health centers without filing an insurance claim. Although the health care providers can claim reimbursement, a poor understanding of workers’ compensation processes may add further to underreporting [see Michael Dworsky, Nicholas Broten, “How Can Workers' Compensation Systems Promote Occupational Safety and Health? Stakeholder Views on Policy and Research Priorities”, Rand: 2018 available at https://www.rand.org/pubs/research_reports/RR2566.html]

The Kyung et al study noted earlier found nonreporting ranged from 25 to 91% in the 20 studies included in the analysis.  Individual studies examined various aspects including occupation and type of work-related injury, factors that can account for some of the variation.   

Of cited studies focused on workers’ compensation claim filing, two studies of General Workers in Michigan found the following prevalence of not reporting (as reported in Tables 1 and 2 Kyung et al):

68% - work-related pain in backs, wrists, hands, or shoulders (repetitive trauma) reported by physicians in the last 12 months

45% - work-related injuries resulting in lost work time

27% - work-related injuries resulting in missed more than seven consecutive days of work

[Biddle J, Roberts K., Claiming behavior in workers’ compensation. J Risk Insurance. 2003;70(4):759–780 ]

75% - diagnosed repetitive trauma with neck, upper extremity and low back work-related musculoskeletal disease during the 12-week [study period].

25% - resulting in missed more than 7 consecutive days of work during the 12-week [study period]

[Rosenman KD, Gardiner JC, Wang J, Biddle J, Hogan A, Reilly MJ, et al. Why most workers with occupational repetitive trauma do not file for workers’ compensation. J Occup Environ Med. 2000;42(1):25–34]

Note the prevalence of not reporting a work-related injury decreases for cases involving greater missed days. 

Another study cited focused on General Workers in Washington, DC.  The prevalence of not reporting was:

47% - positive response to at least on of the following: In the past 12 months, have you been injured while performing your job [or] has a doctor or other medical professional told you that you have a work-related illness.

[Fan ZJ, Bonauto DK, Foley MP, Silverstein BA. Underreporting of work-related injury or illness to workers’ compensation: individual and industry factors. J Occup Environ Med. 2006;48(9)]

Other studied examine the prevalence of underreporting that may be more employer centric.  An Australia study found only 19% of injuries recognised by the insurer were recognised by the company as recordable incidents.  [Geddert, K., Dekker, S., & Rae, A. (2021). How Does Selective Reporting Distort Understanding of Workplace Injuries? Safety, 7(3), 58]

The Institute for Work and Health (IWH) 2021 study on claim suppression found:

 “The estimated rate of claim suppression of work-related injury or disease in B.C., based on a survey of workers, is in the range of 3.7 to 13.0 per cent, with estimates towards the lower end being more likely.” [ https://www.iwh.on.ca/summaries/issue-briefing/claim-suppression-in-bc-workers-compensation-system?  ]

 The IWH briefing note concisely summarizes other Canadian studies noting:

Under-claiming rate for lost working-time benefits
WorkSafeBC study	53.7% (2 or more days of lost working time)
Manitoba study	40.2% (2 or more days of lost working time)
Shannon & Lowe	40.0% (all presumptively eligible claims)
Nadalin & Smith	64.5% (all presumptively eligible claims)
Risk that a time-loss injury was reported as a no-time-loss Injury
WorkSafeBC study	4.1% to 12.1%
Manitoba study	14.3% to 35.1%
Ontario study	5.0% to 10.0%
Estimated incidence of claim suppression conduct
WorkSafeBC study	3.7% to 13.0% (depending on question)
Manitoba study	11.5%

 

Note the wide variability in results with a low-end estimate among these of about 4% to a high end of nearly 65%.  The results vary widely on the population of workers studied, industry, size of employer, the definitions used and the questions asked. 

Non-reporting particularly of no time-loss or low time-loss work-related injuries is clearly a significant issue, accounting for many of the reported high percentages. Active, passive, and de facto claim suppression as defined here applied to eligible cases involving more than three days away from work and medical expenses are likely at the lower end of the range. 

Non-reporting conduct is noted in self-insured as well as experience-rated premium-paying firms.  There seems to be some evidence that self-insured have lower levels of non-reporting of work-related injuries.  Self-insured firms tend to be very large with established safety and reporting systems that may account for lower levels of non- and underreporting conduct. 

Final thoughts

Under-reporting, various forms of claim suppression and systemic barriers to filing a claim contribute to the attrition of otherwise eligible work-related injuries becoming accepted workers’ compensation claims.  This has profound implications for workers, employers and policy makers. 

From the OH&S perspective, data on injury rates derived from workers’ compensation are likely understating the harms to workers.  From the workers’ compensation perspective, recognizing the magnitude of the attrition is an essential step in overcoming the barriers and mitigating the root causes.

In the next post, we will examine the attrition as initiated claims from eligible workers with work-related injuries make their way through the adjudication/decision-making process.