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November 21, 2000

Department adopts $20 million workers' comp rate reduction

TUMWATER - The Department of Labor & Industries today adopted a 2.2 percent general rate reduction for workers' compensation premium rates. The result is about a $20 million general rate reduction for 2001.

Labor & Industries manages the state's workers' compensation system - referred to as the State Fund. The State Fund is made up of several funds that provide benefits when workers are hurt on the job. It provides coverage for more than 163,000 employers and 1.9 million workers.

The 2001 reduction includes a 7.5 percent decrease in the Accident Fund. Premiums in the Accident Fund are paid entirely by employers. Those premiums provide wage and disability benefits.

Medical Aid Fund premiums will remain the same for 2001. That fund pays medical costs for injured workers. Employers and workers share equally in its premium payments.

The smaller Supplemental Pension Fund premiums will rise 14 percent. This resulted from the recent 8.4 percent cost-of-living increase to workers who are on pension or receiving time-loss benefits. Employers and workers contribute equal premiums for this fund.

The adjustments to the three funds result in a 2.2 percent over-all general rate reduction. The new rates will take effect Jan. 1, 2001.

Hearings on the proposed 2001 rates were held earlier this month in Spokane and Tumwater.

The 2001 reduction is an average for all industry groups. Some employers may see decreases and others increases depending on their industry classification and their own claims history.

The 2001 base rates by class and industry are on the department's web site at www.lni.wa.gov/insurance/rates/RatesRiskClassifications.htm.

This is the seventh consecutive year the average cost for workers' compensation will not go up.


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