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Proposed workers’
compensation premium increase would hurt employers, workers
Rep. Barbara Bailey
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 six
public hearings (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. Please let me know
if you have any questions.
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
Spokane | Oct. 30, 9 a.m. | Spokane Airport Ramada,
8909 West. Airport Drive
Richland | Oct. 30, 2 p.m. | Richland
Hampton Inn, 486 Bradley Boulevard
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