Workers' Comp Premiums Increasing by 3 Percent
Individual employers could see their rates go up or down depending on their recent claims history and any changes in the frequency and cost of claims in their industry.
Insurance actuary calculations based on anticipated injured-worker claims next year and on wage and medical inflation indicated the need for a 6.3 percent premium increase generating $119 million. Instead the decision to implement a 3 percent increase will generate $57 million with the contingency reserve absorbing the remaining $62 million.
We recognize the difficult economic environment for business and workers and wanted to limit the increase as much as possible said L&I Director Judy Schurke.
As part of the governors economic stimulus package L&I will be working with business and labor and the governor to evaluate whether more can be done in 2009 to help businesses survive and workers stay employed.
We want to do everything we can in the short term to help businesses and workers weather the economic recession she said.
With the 3 percent increase average premiums will go up by approximately 2 cents per hour worked. The 2009 rate tables by industry are available online.
Washingtons workers compensation system is made up of three funds that provide benefits when workers are hurt on the job. The Accident Fund rate will increase 1.8 percent. Employers pay premiums into this fund. The Medical Aid Fund rate will go up by 3.2 percent and the Supplemental Pension Fund rate will increase 7 percent. Employers and workers contribute equal premiums into the latter two funds.
Schurke noted that the systems contingency reserve has dropped from $1.6 billion in September to approximately $990 million in the volatile markets. All workers comp insurers maintain contingency reserves. Washingtons contingency reserve has one of the lowest ratios of reserves to liabilities. It currently is 9.7 percent of the total liabilities which now stand at $10.2 billion.
Washingtons workers compensation system the eighth-largest industrial insurance system in the United States provides coverage to about 2.57 million workers and more than 170000 employers. L&I also oversees workers compensation programs that cover an additional 870000 workers whose employers self-insure.