The NAIC Should Address Workers’ Comp Burial Benefit Disparities
Burial payouts from states for work-related deaths can range from $3,500 to $96,000.
- Lance Ewing
- April 2022
A young man was interviewing for a lion tamer's job. “I understand your father was a lion tamer, too?” the circus manager asked. “Yes sir. He taught me everything I know,” said the young candidate. “Can you train them to jump through hoops?” “Yes sir,” came the reply. “Can you have them stand on their hind legs?” “Sure can,” the young man said. “Have you ever put your head in a lion's mouth?” “Only once,” the applicant admitted, “but it was to look for my father.” Or so the story goes.
Every occupation has risks and exposures. Business Insider reported the five most dangerous jobs in the United States in 2020, based on information from the U.S. Bureau of Labor Statistics, are fishing and hunting workers (think Deadliest Catch); loggers; commercial and residential roofers; construction employees; and aircraft pilots and flight engineers (helicopter pilots are in this category). All five of these roles have a higher-than-average fatality rate in comparison to other careers.
On the other side of the scale, in 2019 Forbes rated the five safest jobs based on fatalities per 100 people as nuclear power plant operators, actuaries, accountants, computer system analysts and medical record operators. While workers' compensation rates vary from state to state and job classification to job classification, when an employee dies while in the course and scope of their employment, workers' compensation does provide death and burial benefits to the families or lawful beneficiaries. This benefit is to be paid no matter whether the job was highly hazardous or safer than any other.
The disparity of workers' compensation death benefits, specifically burial expenses, between states may seem eye-opening and appalling to many. The state with the most substantial death and burial benefit is Kentucky, providing $96,000 in expenses to the family of a deceased employee, when death occurred in 2022.
Oregon is the next-highest paid burial expense state. But the chasm between Kentucky and Oregon is tremendous. Oregon pays workers' compensation burial benefits of $25,000. That is a $71,000 delta. In descending order, Rhode Island is at a flat $20,000 followed by Minnesota at $15,000. New York has a sliding scale of $12,500 to $10,500 for workers' compensation burial benefits depending on the county in which the employee worked. The beneficiaries and surviving families of the fishing professional or the logger in Kentucky who dies in the course and scope of employment will receive the highest available state burial benefit.
Yet if that same employed logger or fishing professional passes away in New Jersey, their workers' compensation death payment to the beneficiaries is only $3,500 for burial expenses. Londen Insurance Group Inc., part of the Lincoln Heritage Life Insurance Co., reports that the average traditional funeral in 2020 cost between $7,000 and $12,000. The average cost of a funeral with cremation was $6,000 to $7,000.
In addition to the differences in burial payouts for work-related deaths is the amount of time for a family to file for death benefits under workers' compensation. The statutes can range from six months (West Virginia) to six years (Minnesota and North Carolina) to file.
Perhaps it is time for the National Association of Insurance Commissioners to consider and address those states that are not at least keeping up with the average cost to bury an employee who dies, whether or not they had a dangerous job.
Best’s Review columnist Lance Ewing is vice president, enterprise risk management and operations for the San Manuel Band of Mission Indians. He also is a former president of the Risk and Insurance Management Society. He can be reached at email@example.com.