The Workers Compensation Research Institute released its CompScope Benchmarks, 2026 Edition on April 28, covering claims with experience through 2025 across 18 states. The headline: total claim costs per lost-time injury grew at a median rate of 6% per year from 2022 to 2025. Annual increases ranged from 4% to 14% across the study group, with Minnesota at 10%, New Jersey at 8%, Virginia at 7.4%, Delaware at 7%, California at 6%, and Florida at 4.5%.
What distinguishes this cycle from earlier ones is that no component is providing an offset. Medical payments, indemnity benefits, and benefit delivery expenses are all rising at the same time.
Who it affects
Self-insured employers, single-parent captives, and public entity pools carrying workers’ compensation across any of the 18 study states (Arkansas, California, Delaware, Florida, Illinois, Indiana, Iowa, Kentucky, Louisiana, Massachusetts, Michigan, Minnesota, New Jersey, North Carolina, Pennsylvania, Texas, Virginia, and Wisconsin). The pattern is broad enough that employers in non-study states should assume similar pressure unless their own data says otherwise.
Three components, one direction
Medical payments rose through price growth, not increased utilization. In California, medical costs per claim grew 7% in 2025, averaging 6% annually from 2023 to 2025. High-cost claims (6% of count but 40% of total medical spend) were a key severity driver. Comorbidities amplify the problem: one in five injured workers has a degenerative condition, making their claims at least 30% more likely to become high-cost.
Indemnity benefits climbed on rising wages and longer temporary disability durations. California’s indemnity grew 4% in 2025 after running at 7% to 8% annually from 2022 to 2024. Average weekly wages for workers injured in 2024 rose 3.5%, though wage growth for injured workers has moderated in recent quarters.
Benefit delivery expenses jumped as defense attorney involvement and medical-legal costs rose. California saw 9% annual growth in this component, with defense attorney involvement increasing 5 percentage points cumulatively from 2022 to 2025. Medical-legal payment claims rose 2 percentage points over the same period.
The reserve mechanism: development pattern distortion
When all three cost components accelerate simultaneously, historical development patterns trained on the flat-to-favorable years before 2022 will understate the tail. Selected link ratios anchored to a longer experience period that includes those favorable years produce development factors that are too low for recent accident years. The effect compounds: medical severity pushes up the paid development tail, longer temporary disability durations extend the incurred tail, and rising litigation costs widen the gap between case reserves and ultimate settlement values.
For self-insured employers running workers’ compensation programs, this means the expected claim ratio and the loss development factors may both need adjustment in the same direction.
What this means for your next review
Ask your actuary whether selected loss development factors reflect the post-2022 acceleration in all three cost components or whether they remain anchored to a longer trend period that includes the favorable years. Request a comparison of actual-to-expected development on accident years 2022 through 2024 against the factors in the current study. If actual development is consistently running above expected, the selected factors are understating your IBNR.
Also ask how high-cost claims (the 6% of count driving 40% of medical spend) are affecting your development patterns, and whether a separate large-loss loading or cap is warranted.
WCRI will release the 23rd Edition of CompScope Medical Benchmarks later in 2026, providing more granular state-by-state medical price data. The May 12 CPI medical care release will offer an early signal on whether the medical price re-acceleration that NCCI flagged is continuing.