Workers’ Compensation Amid Change: How an Insurance Agent Guides Skilled Nursing and Assisted Living Facilities Through Risk and Growth

By: John Wildfire, Vice President, Healthcare Practice Leader, One80 Intermediaries | PMC Insurance Group, Part of Bridge Specialty Group, LLC

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In today’s long-term care environment, insurance agents have a powerful opportunity to move beyond transactional support and serve as strategic risk advisors. Workers’ compensation is not just an insurance line for skilled nursing facilities (SNFs) and assisted living facilities (ALFs)—it is a cornerstone of financial stability, operational continuity, and workforce sustainability. These organizations face elevated injury risks driven by the physical demands of caregiving, regulatory scrutiny, and persistent labor shortages.

Compounding these challenges, industry consolidation and heightened merger and acquisition (M&A) activity have materially changed how workers’ compensation risk is underwritten, priced, and managed across multi-location and rapidly scaling organizations.

In this environment, agents who can help clients navigate the workers’ compensation implications of growth, integration, and operational change add value—strengthening relationships while helping risk managers and operators make better-informed decisions.

Industry Overview: Skilled Nursing and Assisted Living

The long-term care sector in the United States is vast and essential to an aging population. Skilled nursing facilities provide 24-hour medical care and rehabilitation services, while assisted living facilities focus on custodial care and support with activities of daily living.

According to AHCA/NCAL, there are almost 15,000 SNF’s plus 32,000 ALF’s in the United States today. Those organizations employ over 4 million workers (including nurses, certified nursing assistants (CNAs), therapists, and support staff) to form the backbone of post-acute and long-term residential care. It is important to note that these organizations face tremendous regulatory and reimbursement pressures. Medicaid covers a majority of nursing home residents. However, reimbursement rates are often well below the total cost of care.

Owners face significant financial strain with operating within extremely thin margins – around 0.4%, on average. And labor is still their largest expense. The successful insurance agent helps ease this pain.

Workers’ Compensation Exposure in Long-Term Care

Just as in other industries, workers’ compensation insurance covers medical expenses, lost wages, and disability benefits for employees injured on the job. In SNFs and ALFs, the exposure is among the highest in healthcare. The key drivers of risk in these facilities are most commonly:

1. Patient Handling and Ergonomics Staff frequently lift, reposition, and transfer residents—many of whom are immobile or cognitively impaired. These tasks lead to high rates of musculoskeletal injuries, especially back strains.
2. Slips, Trips, and Falls Facilities operate 24/7, often with tight staffing levels. Wet floors, cluttered hallways, and urgent response situations contribute to fall-related injuries.
3. Workplace Violence Caregivers may face aggression from residents with dementia or behavioral conditions, leading to both physical and psychological injury claims.
4. Infectious Disease Exposure COVID-19 highlighted the vulnerability of long-term care staff to communicable diseases, increasing both claim frequency and severity.
5. Staffing Shortages and Overtime The workforce in these facilities is under enormous strain with projections indicating a need for over 800,000 additional workers by 2036. Fatigue and burnout increase the likelihood of injury.

Cost and Claims Trends

Workers’ compensation claims in SNFs and ALFs tend to exhibit:

• High frequency due to repetitive physical tasks
• Moderate-to-high severity due to chronic injuries
• Long claim durations, particularly for back injuries

Of note, litigation costs can be elevated, particularly in cases involving alleged negligence or unsafe staffing levels. To state the obvious, this can severely impact an insured’s future insurance cost. To help mitigate these situations, an experienced and knowledgeable insurance advocate will ensure that strong risk management programs are in place and include:

• Complete and industry specific employee training programs
• Availability and appropriate use of lift-assist equipment
• Easy to implement and readily available return-to-work protocols
• A management supported safety culture and incident reporting systems

Facilities with poor regulatory histories or high deficiencies in these areas may face higher premiums and/or limited carrier availability. These constraints limit investment in staffing and safety infrastructure, indirectly increasing workers’ compensation exposure.

How High Merger and Acquisition Activity Has Led to Consolidation

Over the past decade, the SNF and ALF sectors have undergone major consolidation, driven by financial distress, demographic demand, and investor interest. Recent data highlights the acceleration:

• Over 700 M&A transactions in senior housing and care were recorded in 2024, a 26% increase over the previous high (Lument 3/13/2025)
• In early 2025 alone, 176 deals were announced in a single quarter, up 13.6% year-over-year (McKnight’s 4/16/2025)
• Assisted living accounted for the largest share of transactions, followed by skilled nursing (Skilled Nursing News)
• Private equity has played a major role, with thousands of acquisitions across senior housing, including hundreds involving assisted living

What Has Driven the Industry’s Consolidation and What Has Happened as a Result?

1. Financial Distress: Rising labor costs, regulatory burdens, and reimbursement challenges have reduced profits, forcing owners into financial distress and leading them to become acquisition targets. Due to this, many facilities are pooling their risk in the form of self-insurance programs, captives and loss sensitive programs. By taking on more risk, they may reduce premium costs and increase profitability.
2. Economies of Scale: Larger operations can centralize administration, staffing sources, risk management and the purchase of insurance. Multi-facility operators often are able to use uniform training programs, share standardized equipment (such as lifts and gate belts) and implement data injury prevention initiatives. These can lead to improved claims outcomes over time. This is the reason we see an increase in the use of management companies.
3. Real Estate Investment Models: Many deals involve separating operations from property ownership, with real estate investment trusts (REITs) acquiring physical assets. Even so, in many states, buyers of the operations must still give serious consideration to the potential for increased insurance costs related to a retained workforce. They must evaluate historical loss performance, review open claims and evaluate OSHA violations with any litigation.
4. Demographic Demand: The aging U.S. population continues to drive long-term demand for care services. Despite the continued need for these services, insurers are more familiar with the need to assess complete corporate ownership structure, financial stability, quality metrics and even social media reviews.

The Outlook for Long-Term Care Facilities is Positive

There are several likely trends which will continue to shape the industry:

1. Continued Consolidation: The market is expected to maintain momentum, with deal volume and value projected to rise through 2026
2. Decline in Skilled Nursing Supply: While the number of SNFs has declined about 6% over the past decade , the assisted living model continues to grow, particularly in the form of residential living communities.
3. Technology Adoption: Automation, electronic health records, and virtual health resources may reduce injury rates and overall claims costs.
4. Workforce Pressures: Labor shortages will remain a key driver of claims frequency unless mitigated by improved staffing models. However, payroll per employee continues to rise.

Don’t Wait – Start Today!

For insurance agents looking to grow their book, there is a clear opportunity to do so by supporting those businesses providing SNF & ALF services. While it may seem intricate or overwhelming on the surface to prospect for, win and retain insurance programs for clients which hire a diverse selection of employee functions, implement complex business models or are going through hefty M&A activity, having the right healthcare industry specialist as a partner can make it a whole lot easier.

PMC Insurance, part of Bridge Specialty Group LLC, has been writing workers’ compensation programs for skilled nursing and assisted living facilities for decades. We understand the space, work with national carriers which do, too, and assist insurance agents to place even industries’ most complex risks. Contact me directly at [email protected] to learn more. Keep in mind that we now offer solutions for all lines of coverage in the SNF/ALF space. See more here: Coverage solutions for all your healthcare clients.