L&I proposes 4.8% increase in 2023 workers’ comp rates

TUMWATER (Sept. 21, 2022) — The state Department of Labor & Industries (L&I) is proposing a 4.8 percent increase in the average price employers and workers pay for workers’ compensation insurance next year. If adopted, the increase would mean employers and workers would jointly pay an additional $61 a year, on average, for each full-time employee within a business.

“Even with the increase, the average hourly rate businesses will pay will be about the same as what they were paying in 2016,” L&I Director Joel Sacks said. “After keeping rates steady to help businesses that were struggling during the pandemic, we’re now proposing a modest rate increase that’s in line with our goal of stable and predictable rates for businesses to ensure the long-term health of the workers’ compensation fund.”

Washington’s workers’ compensation system is a critical safety net for working families. The system’s statutory goal is “to provide sure and certain relief for workers, injured in their work, and their families and dependents.” Its benefits help thousands of Washington families avoid economic catastrophe when someone is injured or sickened at work.

Employers and workers pay into the workers’ compensation system to help cover the cost of providing wage and disability benefits for injured workers, as well as medical treatment of workplace injuries and illnesses. Workers will continue to pay on average about a quarter of the premium, a similar percentage to that paid in 2022.

General wage inflation and increasing medical costs all make it more expensive to provide this workplace safety net. As workers’ wages go up, the cost of insuring them goes up as well, since much of the benefits directly paid to workers are tied to how much they are getting paid.

Contingency reserves limit increases

In 2021 and 2022, L&I helped employers and workers struggling from the pandemic by tapping its contingency reserves to avoid a larger increase in premium rates. L&I wants to take a similar approach to prevent a larger rate increase for 2023. Under the current proposal, L&I will use contingency reserves to cover any gap between premiums and costs to keep rates steady and avoid a larger increase.

“Since becoming L&I director, Joel Sacks has worked with organized labor and employers to build a responsible contingency reserve for just such an occasion,” said Joe Kendo, Government Affairs Director for the Washington State Labor Council, AFL-CIO. “The 2023 proposed rates fall well below what is necessary for the funds to break even, relying instead on the savings that the Workers Compensation Advisory Committee has supported the department in creating. As planned, this has resulted in stable, predictable rates for 2023, despite volatility driven by the pandemic and medical inflation.”

He added, “The WSLC will continue to pay close attention to the fiscal health of the workers compensation system, and will advocate for whatever is necessary to guarantee sure and certain relief for injured workers.”

Public hearings planned

Public hearings are scheduled for 10 a.m. on Oct. 26 and Oct. 27 to take input on the rate proposal before a final decision is made. To support social distancing, the public hearings will be held virtually. Final rates will be adopted on Nov. 30 and go into effect Jan. 1, 2023. Click here to join the meetings via Zoom. If joining by phone, call 1-253-215-8782. The meeting ID is 428 348 2697.

You can also submit comments in writing to: Jo Anne Attwood, administrative regulations analyst, P.O. Box 41448, Olympia, WA 98504-4148; or email JoAnne.Attwood@Lni.wa.gov. All comments must be received by 5 p.m. on Oct. 28.

More information about the proposal is available at www.Lni.wa.gov/2023Rates.