An Evaluation of New Mexico Workers' Compensation Permanent Partial Disability and Return to Work

Sizing up the adequacy and equity of disability benefits for the state's injured workers The New Mexico workers' compensation system has been widely regarded as a success story since it was significantly reformed a decade ago. Workers' compensation costs for the state's employers are among the lowest in the country, insurer profits are among the highest, and the system is among the least litigious. Given this environment, this book evaluates the adequacy and equity of workers' compensation indemnity for New Mexico workers receiving permanent partial disability benefits. The authors compare outcomes for workers with partially disabling occupational injuries in New Mexico with outcomes for their counterparts in California, Washington, Oregon, and Wisconsin. After controlling for differences across the five states, New Mexico's replacement rates fall in the middle; however, benefits for sustained earnings losses are not adequate by the commonly cited standard of two-thirds pre-tax wage replacement. Scheduled injuries, which include primarily injuries to the arms and legs, are less adequately compensated than unscheduled injuries, which are primarily injuries to the back. The duration of time until an employee's return to work in New Mexico is much longer than that in other states, which may be accounted for by the other states' active return-to-work programs.