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L&I calls for decrease in workers’ comp rates in 2018

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September 20, 2017 #17-034

Tumwater – The average amount employers pay for workers' compensation insurance in Washington would drop 2.5 percent in 2018 under a proposal today from the state Department of Labor & Industries (L&I).

The proposed decrease would result in Washington employers, as a group, paying $67 million less in premiums. The lower rate would mean employers would pay an average of about $34 less a year per employee for workers’ compensation coverage.

L&I attributes the proposed decrease to several factors, including employers and workers focusing on safety, and L&I initiatives that are helping injured workers recover sooner and reducing workers’ compensation costs.

“Efforts to help injured workers heal and return to work are paying off. It’s good for them, it helps employers, and it keeps workers’ compensation costs down,” said Gov. Jay Inslee. “I want to thank businesses and workers for doing their part to improve workplace safety, and L&I for its work to improve the workers’ compensation system. Both are helping create a positive business climate in Washington.”

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 L&I Director Joel 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.”

Keeping rates steady and predictable

Employers and workers pay into the workers’ compensation system to help cover the cost of providing wage and disability benefits, as well as medical treatment of injuries and illnesses. The premiums also provide a safety net by ensuring reserves are available to cover the unexpected, like a natural disaster or downturn in the economy.

Each fall, L&I determines the proposed rate for the following year by taking a close look at expected workers’ compensation payouts, the size of the contingency reserve, wage inflation and other financial indicators.

L&I is working to keep premium rates steady and predictable and avoid significant swings that make it difficult for employers to plan. Small rate increases in recent years and the improved economy have also helped build reserves, allowing for the proposed rate decrease. In the last five years, the average annual workers’ compensation rate increase has been under 1 percent. If adopted, this will be the first decline in the hourly rate since 2007.

Helping injured workers and lowering workers’ compensation costs

L&I has several initiatives underway that are lowering costs by focusing on better outcomes for injured workers. Some examples include promoting workplace safety, ensuring injured workers receive quality health care, providing vocational services to workers and supporting employers who want to keep injured workers on a job.

In the last four years, these and other improvements have resulted in a more than $1.7 billion reduction in projected long-term costs for the workers’ compensation system.

Public hearings planned for October and November

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, WA, 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.

More information about the proposal is available at www.Lni.wa.gov/Rates. Final rates will be adopted by early December and go into effect Jan. 1, 2018.

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Workers’ Comp Facts:

  • L&I is the state’s primary workers’ compensation insurance provider, covering about 2.8 million workers and nearly 180,000 employers.
  • The proposed rate is an average. An individual employer’s actual rate change may be more or less depending on that employer’s industry and history of claims that result in wage replacement and/or disability benefits.
  • Labor & Industries accepts more than 90,000 claims each year.

For media information: Tim Church, 360-902-5673.

Connect with L&I: Facebook (facebook.com/laborandindustries) and Twitter (twitter.com/lniwa)

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