WORKERS COMP REVISIONS BEING CONSIDERED

     Workers Compensation (industrial insurance) is at risk in Washington. The State Auditor last December reported that it expects the program to become insolvent within the next five years. Recession is the villain: (1) lower income is earned from the investment of its reserves, (2) fewer hours are worked and less money is flowing into the reserves, and (3) injured workers are taking longer to recover.

     Both employees and employer pay into funds to cover medical bills for on the job injuries and to replace a portion of the wages lost during the recovery. The type of work makes the biggest difference in how much is collected for the fund. On the high side, the per hour rate for loggers is $12.86, roofers pay $5.39, while teachers pay $0.27 and bank tellers $0.16 per hour. The average is $0.68 per hour, of which the employee pays about 25 percent through payroll deduction.  Ten years ago the average rate was $0.35 per hour. The rate goes up and down with the economy and claims.

     Governor Gregoire, the House, and the Senate have each put forward proposals. There are three flavors:

(1) A pre-approved pool of physicians to treat work injuries [SB 5801]. Both houses have passed and the governor has signed this legislation.

(2) The House has three bills which tinker with a rainy-day fund, place a one-year freeze in cost-of-living adjustments to pensions paid from the system, and a reduction of duplication of coverage for disabilities. The House package is dismissed as too little by most observers. House Democrats say the fiscal issue will resolve itself as the economy recovers. Labor, though not excited, prefers the House bills to the Senate proposals.

(3) Provide injured worker with a choice for a lump-sum settlement for lost-time wages. This is ESB 5566 and has been passed 34-15 in the Senate with more enthusiastic support from Republicans than Democrats. ESB 5566 goes to the House with a push from the governor and the business community. The fiscal note from the Department of Labor and Industries give the bill $1.2 billion in savings in the next biennium. The governor, however, lately has cooled on what she has said “is an insurance-industry way of doing business, pay a worker off and forget them…” House Democrats say the bill is dead.

     Washington State does stand out. Workers compensation payments per worker in Washington and California are the highest in the country. They are about seventy-five percent higher than Minnesota, Wisconsin, and Michigan, not to mention Louisiana, Mississippi, and Georgia. It is reported, for example, that our average time loss per claim is 284 days versus 120 days national average. These dollars come out of the workers’ pockets. We need to identify and address the drivers of our high costs without jeopardizing the health and safety of workers on the job.

What We Believe