L&I proposes 2.5% rate decrease for workers’ comp in 2018

By DAVID GROVES
The Stand

TUMWATER (Sept. 22, 2017) — Five years ago, business lobbyists in Washington were apoplectic about the state-run workers’ compensation system. Reserve funds in the safety net for injured workers had been drawn down to low levels after the recession and they were warning that employers should brace for the “mother of all rate hikes” of 19 percent for each of the next 10 years to stabilize the system. They even suggested it could cost then-gubernatorial candidate Jay Inslee that year’s election.

As it turned out, not so much.

Inslee was elected and cooler heads prevailed at the state Department of Labor and Industries (L&I). The system’s reserves gradually recovered without a spike in rates thanks to L&I’s successful efforts to promote workplace safety and help injured workers return to work sooner, plus an improved performance in the reserve fund investments. Instead of 19 percent hikes, the average annual workers’ compensation rate increase over the past five years has been less than 1 percent.

On Wednesday, the news got even better. L&I announced a proposal to decrease rates an average of 2.5 percent in 2018, collectively saving the state’s employers about $67 million or an average of about $34 less per employee in 2018. In Washington, both employers and workers pay into the workers’ compensation system to help cover the cost of providing wage and disability benefits, as well as medical treatment of injuries and illnesses.

“Efforts to help injured workers heal and return to work are paying off. It’s good for them, it helps employers, and it keeps workers’ compensation costs down,” said Gov. Inslee. “I want to thank businesses and workers for doing their part to improve workplace safety, and L&I for its work to improve the workers’ compensation system. Both are helping create a positive business climate in Washington.”

Washington State Labor Council President Jeff Johnson echoed that sentiment and added that, even with the proposed rate decrease, L&I should continue down the path of bolstering reserve funds for the long-term stability of the system.

“This is a tribute to successful return-to-work efforts,” Johnson said, “and it is a reasonable rate reduction to propose while continuing to guard against rapid rate swings from year to year.”

L&I says it’s working to keep premium rates steady and predictable and avoid significant swings that make it difficult for employers to plan. If adopted, this will be the first decline in the hourly rate since 2007.

In the mid-1990s and in 2007, the state offered employers dramatic rate cuts and major employer rebates that destabilized the system. When the economy hit a downturn, those gimmicks necessitated dramatic rate increases (see chart above) to help the system recover at the worst possible time for employers and workers.

L&I will conduct a series of public hearings in October and November where people can learn about and comment on the proposed rates. The hearings are scheduled for:

• Everett, Oct. 24, 10 a.m., Everett Community College Corporate & Continuing Education Center
• Spokane Valley, Oct. 25, 9 a.m., Spokane CenterPlace
• Richland, Oct. 26, 9 a.m., Richland Community Center
• Vancouver, WA, Oct. 27, 10 a.m., Vancouver NW Regional Training Room
• Tumwater, Oct. 30, 10 a.m., Dept. of Labor & Industries Headquarters
• Tukwila, Nov. 1, 10 a.m., Dept. of Labor & Industries Tukwila Office

You can also comment in writing via email or sending written comments to the Department of Labor and Industries, attn: Jo Anne Attwood, P. O. Box 41448, Olympia, WA 98504-4148. All comments must be received by 5 p.m. on Nov. 1. The final rates will be adopted by early December and go into effect Jan. 1, 2018.

Click here for more information on the rate proposal.