L&I proposes 2.5% decrease in workers’ comp rates; AGC seeks reforms

 

The average amount employers pay for workers' compensation insurance in Washington would drop 2.5 percent in 2018 under a proposal from L&I. For specific construction classifications, the proposed rates range from a one percent increase to a 15 percent decrease. Click here to view proposed rates for all classifications.

It is important to note that the decrease is just a proposal, and won’t be final until a public comment hearing is complete later this year (hearing dates below). Final rates will be adopted by early December and go into effect Jan. 1, 2018.

AGC welcomes any decrease in premiums but believe the rates could be even lower by increased administrative efficiencies, eliminating the age requirement for settlements on claims, and establishing a fair and accurate timeloss rate calculation. Currently, due to implementation of court decisions, there are cases where a worker’s timeloss compensation can be higher than their average annual wages which significantly contributes (per the Upjohn Pension Study) to increases in longer term disability claims and higher pension rates in Washington’s system. Longer term disability and higher pension rates also contribute to higher Supplemental Pension Fund Rates for both State Fund and Self Insureds. This year the Supplemental Pension Rate is proposed to increase by 7.3 percent to just over 10 cents an hour. This fund pays cost of living adjustments (COLAs) on timeloss and pension claims and COLAs per RCW are based on the states average wage as opposed to inflation.

Lauren Gubbe, Director of AGC’s workers’ Compensation Group Retro program, indicated “Washington rates are calculated based on man hours as opposed to wages like most other states. As such, comparisons with other states premium rates tend to be ‘apples and oranges’ since most states have built in rate increases as wages rise making cost rate increases not as visible. Further, the worker deduction for Medical Aid premium, the Claims-Free Discount program, Third Party 50% cost or reserve relief, as well as, occupational disease liability relief for State Fund employers are unique to Washington.“

For AGC Retro members, individual proposed rates have already been requested and should be available the end of September or early October and will be distributed to Retro members. Gubbe is also planning Experience Modification Rate (EMR) and Red Flag claims tip workshops/webinars. AGC Retro members are urged to look for those notices soon. Companies interested in attending but not yet in AGC Retro can contact Lauren Gubbe.

In announcing the proposed rate decrease, L&I Director Joel Sacks said that in recent years, L&I has been providing vocational support and assistance much earlier in claims. It’s helping reduce long-term disability and improving return-to-work results for those hurt on the job. The agency’s Stay at Work Program is also making a difference, providing employers more than $58 million to help keep more than 25,000 workers on light duty while they heal.

“We’ve made some very positive steps with our initiatives to help people who are hurt on the job recover and start working again,” said Sacks. “These and other workplace safety and health improvements have allowed us to build our reserves, while at the same time propose a cut to the average premium rate employers and workers pay. It’s a win-win.”

The agency will hold a series of public hearings 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  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

People can also comment 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. Nov. 1, 2017.