The Workers Compensation Research Institute published its CompScope Benchmarks for Pennsylvania, 2026 Edition on June 9, showing that total workers’ comp costs per claim in the state grew faster in 2025 than 15 of 17 study states. Only Iowa and Louisiana posted higher growth. For self-insured employers in a state with one of the nation’s largest manufacturing, healthcare, and public entity self-insurance bases, the report signals that the mild severity environment of 2020 to 2022 has reversed.
Who it affects
Self-insured manufacturers, healthcare systems, public school districts, and municipalities in Pennsylvania. The state’s large self-insured population means the WCRI data directly reflects the claim environment these programs are reserving against, not a proxy drawn from insured market experience.
Two severity drivers, one direction
Indemnity benefits per claim rose 9% in 2025, continuing an acceleration that began in 2022 after several years of flat-to-declining costs. Three structural factors are behind the number: Pennsylvania carries the highest average weekly temporary disability (TD) benefit rate among all 18 WCRI study states, TD durations are lengthening, and settlement amounts are growing. The wage-indexed benefit rate is a statutory feature, not cyclical; it compounds with every additional week of duration.
Medical payments per claim grew 11%, driven by professional services price increases and fee schedule adjustments tied to the statewide average weekly wage. While the 11% figure places Pennsylvania roughly mid-pack for medical growth alone, the combination of above-average medical and top-tier indemnity growth is what pushed total costs to the upper end of the study group.
Benefit delivery expenses remain higher than peer states, with litigation costs as the primary driver. Higher attorney involvement slows case closure, extends development tails, and adds allocated loss adjustment expense that inflates the gap between case reserves and ultimate incurred cost.
The reserve mechanism: severity acceleration meets stale factors
Self-insured employers that calibrated loss development factors to the 2020-to-2022 period, when costs were flat or declining, are carrying factors that understate the tail on accident years 2023 forward. The acceleration is broad-based: indemnity and medical are moving together rather than offsetting, and litigation-driven expenses are extending time to closure.
When both severity components accelerate simultaneously, the expected claim ratio selected from recent favorable experience will also be too low. Stale expected loss ratios and understated development factors compound into material adverse development by the time it surfaces in the triangle.
The national WCRI CompScope 2026 data already flagged 6% median annual growth across all 18 states. Pennsylvania is running well above that median.
What this means for your next review
Ask your actuary three questions before the next reserve study:
- Are selected development factors Pennsylvania-specific, or blended with national data that may understate the state’s litigation-driven tail?
- Has the post-2022 indemnity acceleration been incorporated into the current accident year expected loss ratio, or is the pick still trending off the 2020-to-2022 decline?
- Do current case reserves reflect the lengthening TD durations that the WCRI data documents, or is development on known claims building in the background?
WCRI will release state-specific medical cost studies later in 2026 that will disaggregate whether Pennsylvania’s 11% medical growth is driven by price, utilization, or high-cost claim emergence. Each carries a different reserving implication. Until that data arrives, the prudent move is to stress-test your medical severity trend assumption at the 11% level rather than anchoring to the national median.