Workers’ comp premium hike would hurt employers, workers
October 9, 2009 · 8:35 AM
On Sept. 21, state Department of Labor and Industries (L&I) recommended a 7.6 percent workers’ compensation premium increase for the upcoming year.
Unfortunately, this proposed $117 million increase could not have come at a worse time as our economy attempts to stabilize.
A workers’ compensation premium increase would not only hurt employers — it would hurt workers.
That’s because Washington is the only state in which workers pay a significant portion of premiums.
This would add to the ongoing struggles of employers that are trying to keep their doors open and many families who are living paycheck to paycheck.
The state’s justification for the increase is escalating workers’ compensation system costs. But costs must be understood in context. For example, the total number of workers’ compensation claims filed has actually fallen by 55 percent since 1990.
This is a good thing. However, claim management costs have drastically increased — administrative costs are up 28 percent in the past year alone.
This suggests a broken system that needs reform.
The bottom line is employers and workers need a workers’ compensation system that is less costly, more flexible and assists employees in effective ways to return to their workplaces quicker.
In the short term, our state should:
• bring its coverage of occupational disease claims in line with a majority of states (Washington has one of the broadest legal standards in this coverage);
• create a settlement option for complex and long-term claims as an alternative to pensions (Washington is just one of six states that does not allow final settlement agreements); and
• allow the use of medical provider networks to treat injured workers according to best practices and treatment guidelines at costs that can be negotiated and stabilized (42 other states allow this).
In the long term, our state should explore the transformational solution of allowing competition into its workers’ compensation system.
Washington is only one of four states that administer its own system and it operates as a monopoly.
Every minute and dollar our state spends on administering its workers’ compensation system is another minute and dollar that could be spent on priorities such as education, public safety and protecting vulnerable citizens.
West Virginia privatized its workers’ compensation system and now has more efficient claims administration, lower costs for employers and better treatment of injured workers.
In the first year alone, its overall premiums dropped by 30.3 percent — or more than $150 million.
A final 2010 workers’ compensation premium increase will not be adopted until late November — following public hearings in Western Washington (see below).
If you cannot attend a hearing, please know your voice can still be heard in the process.
You can submit your comments in writing before Nov. 7.
Written comments can be e-mailed to Ronald Moore (MOOA235@lni.wa.gov), Employer Services Program Manager.
Or, you can mail a letter to him at the state Department of Labor and Industries, P.O. Box 44140, Olympia, WA 98504-4140.
• Tukwila — Oct. 27, 1 p.m., L&I Office, 12806 Gateway Drive
• Tumwater — Oct. 28, 10 a.m. , L&I Headquarters, 7273 Linderson Way S.W.
• Vancouver — Oct. 28, 10 a.m., Red Lion Inn at the Quay, 100 Columbia Street
• Bellingham — Oct. 29, 1 p.m. | Bellingham Quality Inn, 100 East Kellogg Road
State Rep. Barbara Bailey (R-Oak Harbor) represents Washington’s 10th Legislative District.