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March 28, 1996

Temporary $200 million rate reduction takes effect April 1

TUMWATER - Beginning April 1, employers and their workers in Washington will temporarily pay 27 percent less for workers' compensation - a reduction that translates into a $200 million savings.

The 27 percent across-the-board cut lasts through Dec. 31 and follows a permanent 10 percent, $100 million general rate reduction that took effect Jan. 1 and applies for all of 1996.

Employers and their workers should note that once the temporary rate reduction ends Dec. 31, premium payments will return to regular levels. The department will conduct its annual review of rates during the summer and announce proposals for 1997 premiums by September. The department manages the workers' compensation system in Washington.

A strategic investment decision three years ago to move 11 percent of the workers' compensation investments into stocks has resulted in the $200 million windfall the department will return to employers and workers through the nine-month temporary rate reduction.

"This is a huge capital gain that we are able to pass back to ratepayers," said L&I Director Mark Brown. "This is great news for workers and employers and the state's economy."

Even with the combined $300 million rate cuts for 1996, the system will retain sufficient reserves to meet anticipated future benefit costs. Workers' compensation pays for lost wages, medical bills and pensions when employees are injured in the workplace.

Rate information can be obtained by calling the classification development section at 360-902-4776.

The workers' compensation system in Washington covers 155,000 employers and 1.7 million workers.

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For media information, contact: 
L&I Public Affairs at 360-902-5400 or publicaffairs@lni.wa.gov

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