Perhaps one of the most necessary and important issues being addressed in this Legislative Sessions is that of Workers’ Compensation reform. Washington is one of only four states that do not allow employers to source workers’ compensation insurance competitively through the private market. Over the last 12 years, average workers’ compensation rates in Washington have increased nearly 70%, while in the neighboring states of Oregon and Idaho, rates have decreased 17.5% and increased only 4.1%, respectively, over the same period of time.
Last year, Washington State Department of Labor & Industries reported that the workers’ compensation system is facing a budget shortfall--not to mention the threat of insolvency of the contingency reserve fund due to years of artificially suppressing rate increases in order to mask deficiencies--if L&I doesn’t annually increase rates across the board over the next ten years to the tune of over $1 billion.
The overarching problem is that--as with any monopoly--L&I lacks proper incentive to control costs and to operate efficiently. As a consequence, Washington has some of the largest compensation awards for injured workers, as well as exorbitant time-loss claims that average well-over 250 days of missed work. In addition, pension rates have increased more than 300% since 1996. In fact, outside analysis indicates that it costs L&I $1.81 to run the system for every $1.00 of premium paid into the system.
Small-businesses--those who create jobs--simply cannot afford to continue paying for an expensive, broke system. BNCW congratulates Senator Linda Evans-Parlette and twenty-four other members of the Senate for supporting meaningful workers’ comp reform in the form of Senate Bills 5128, which addresses compensation for injured workers, and SB 5127, which removes structured settlement age barriers. Both of these Bills--alone--would ultimately remove the need for the proposed rate increases over the next 10 years.
However, Governor Inslee has recently indicated that he has not heard from employers that there are problems with the state’s workers’ compensation system! BNCW is encouraging our members to contact the Governor’s office to let him know that workers’ compensation reform is not only necessary, but key to job creation--something he stated, during his campaign, that was his number one goal! For talking points, please click here.
Governor Jay Inslee
Office of the Governor
PO Box 40002
Olympia, WA 98504-0002