Senate bills harm injured workers, families

OLYMPIA (Feb. 4, 2013) — Today in Olympia, Senate Republicans are expected to vote on five workers’ compensation bills that cut benefits for injured workers and their families. If you haven’t already done so, click here to send a message to your legislators urging their opposition to these bills.

The following information about the bills is from the Washington State Labor Council, AFL-CIO (download PDF version):

Our workers’ compensation system is a critical safety net. Nobody expects to be injured at work. But if it happens in Washington state, we expect the medical care we need to recover and the protections our families need if we have to miss work. It’s OUR system, too, because Washington is the only state where workers pay a share of the premiums!

Rather than focus on making workplaces safer and reducing injuries, Senate Republicans want to slash this safety net’s benefits.  All five of the bills described below would harm middle-class people — with kids, families, mortgages, car payments, and student loans — who’ve already suffered a work injury and loss of income.

Legislative changes approved in 2011 are already projected to save $1.5 billion over four years, which is $300 million more than expected, and
these changes have not even been fully implemented yet. As a result, employers and workers had no average rate increases in 2012 or 2013. But having seized control of the Senate, Republicans are quickly pushing to slash benefits for injured workers and their families, and to give employers more control over their medical treatment.

Here is a quick summary of the bills undermining our safety net for injured workers:

SB 5112 allows Retro groups to claim larger rebates by rushing injured workers through the medical examination process.

SB 5112 is a solution in search of a problem. Medical exams are already scheduled 40 days faster for Retro employers than non-Retro groups; ability-to-work assessments are 18 days faster, and performance is 20% faster. Retro employers are well-rewarded for aggressive claims management, receiving $139 million in refunds last year alone.

SB 5112 creates an even bigger financial incentive for employers to rush injured workers through medical exams and to close claims earlier than warranted.

SB 5124 slashes benefits for injured workers for the purpose of employer cost containment.

SB 5124 simply allows employers to take money out of the pockets of injured workers. It does so three ways: by excluding the value of employee health coverage in calculating benefits, imposing a cap at the state’s average wage, and ignoring that injured workers with dependents have higher costs.

Under SB 5124, some middle-class families with a wage earner suffering an on-the-job injury would have their benefits cut by up to 25%.

SB 5126 creates an “absurd and fundamentally unfair” arrangement (so said both the U.S. and State Supreme Courts) in claims involving a third party.

SB 5126 allows the state to recover legal damages—economic (lost wages) and non-economic (pain/suffering)— awarded to injured workers when a third party is responsible for the injury. Current law only allows recovery of economic damages.

It makes sense for the state or the business to get reimbursed for benefits paid out while a third-party suit is settled. It DOESN’T make sense for the state to take away damages for pain and suffering. The business didn’t suffer that pain, the injured worker did!

SB 5127 and 5128 remove all age restrictions on settlement buyouts of injured workers’ claims, which are now limited to workers 55 and older.

SB 5127 and 5128 rob younger workers of future benefits and income. These buyouts only create savings if workers accept less than what they would otherwise receive. Younger workers, in particular, have no way of knowing what their future medical needs/costs will be or what the long-term implications of their injuries will be.

When the money runs out for injured workers who forfeited their claims for lump-sum buyouts, their costs are shifted onto the taxpayers.
These injured workers will be forced to rely on the already strained social safety net for medical care.

Because employers have six months to accept a claim, they have the power to create coercive conditions for injured employees. People in short-term financial distress are more likely to accept lump-sum payments, even if it’s not in their families’ best long-term interests.

BACKGROUND — In 2010, voters in every county in the state overwhelmingly rejected a business-funded initiative to privatize our workers’ compensation system.

In 2011, legislation was approved that cut system costs by $1.5 billion, some $300 million more than originally anticipated. Those savings have enabled the state to keep workers’ compensation rates for employers and workers frozen for two straight years. Injured workers are returning to work faster and as a result, employers’ premiums have not gone up for two straight years. Plus, the state will be putting an estimated $82 million into reserves to start rebuilding the recession-depleted State Fund.

STATE-BY-STATE RANKINGS — Based on our rates effective Jan. 1, 2012 — before these cost savings were established — the most recent Oregon Workers’ Compensation Premium Rate Ranking study ranked Washington state as the 13th most expensive.

But this study doesn’t account for two things: that employers also pay into the Supplemental Pension Fund and that workers pay about 1/4 of the premiums. When accounting for those two factors, it is estimated that Washington’s “employer-cost-only” ranking drops to 22nd place — right in the middle of the pack.

And again, since the date rates were last measured in this study, Washington will have had all of 2012 and 2013 with NO rate increases. We can expect to drop even further in the next state-by-state comparison — by doing nothing more.