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September 17, 2008

Rate less than inflation for 2009

L&I proposal would increase workers' compensation rates by 3 percent

Audio available

TUMWATER — The Department of Labor & Industries (L&I) today proposed a 3 percent increase in 2009 workers’ compensation rates. Average premiums would go up by just under 2 cents per hour worked.

“We are in times of economic uncertainty and we want to do what we can to keep businesses strong in Washington State,” said L&I Director Judy Schurke. “We are recommending a modest increase, even though inflationary pressures suggest a larger increase is indicated.” Two of the biggest factors that influence rates are workers’ wages, which were up 5 percent last year, and health-care costs, which are estimated to increase next year by 5.5 percent.

Because Washington premiums are based on hours worked, L&I must explicitly adjust rates for wage inflation. Other states assess premiums as a percentage of payroll and, as a result, wage inflation is not a factor in their rates.

“The Legislature instructed L&I in 2005 to strive to keep workers’ comp rates stable and predictable to avoid large swings in rates,” Schurke said. “This rate proposal helps achieve that goal and continues that trend.”

The proposed increase, which would bring in an additional $57 million, is an average for all Washington employers. 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. L&I has published online and will soon send to employers the proposed 2009 rate tables by industry.

Washington’s workers’ compensation system is made up of three funds that provide benefits when workers are hurt on the job.

Under L&I’s proposal, the Accident Fund rate would increase 1.8 percent. Employers pay premiums in this fund. The Medical Aid Fund rate would go up by 3.2 percent, and the Supplemental Pension Fund rate would increase 7 percent. Employers and workers contribute equal premiums for the latter two funds.

Washington is the only state where workers pay a substantial portion of premiums. Next year, their share would increase slightly but will remain just over 25 percent if the proposed rates are adopted.

Final 2009 rates will be adopted in late November following six public hearings:

  • Spokane: Oct. 21, 9 a.m., Spokane Airport Ramada, 8909 W. Airport Dr.
  • Kennewick: Oct. 21, 2 p.m., L&I Office, 4310 W. 24th Ave.
  • Bellingham: Oct. 22, 2 p.m., Bellingham Quality Inn, 100 E. Kellogg Road
  • Tumwater: Oct. 22, 2 p.m., L&I Headquarters, 7273 Linderson Way S.W.
  • Vancouver: Oct. 24, 10 a.m., Red Lion Inn at the Quay, 100 Columbia St.
  • Tukwila: Oct. 24, 10 a.m., L&I Office, 12806 Gateway Dr.

Written comments, accepted through Oct. 31, may be e-mailed to Ronald Moore, Employer Services Program Manager, or mailed to him at the Department of Labor & Industries, P.O. Box 44140, Olympia, WA 98504-4140. Faxed comments should go to 360-902-4729.


For media information: Tiffany Scheer, L&I communications manager at 360-902-6043.

Radio broadcast version:
The Department of Labor & Industries said today it is proposing a 3 percent increase in 2009 workers’ compensation rates. They say average premiums would go up by just under 2 cents per hour worked.

L&I says the proposed increase is an average for all Washington employers. Some employers’ rates might be higher, others’ might be lower. The rate increase would bring in an additional $57 million.

Public hearings are scheduled for late October in six locations around the state. More information is available on L&I’s Web site at LNI dot wa dot gov, then click on the “News and Media Center.”

Audio message (16 seconds)

Click the "play" button to listen or download audio (right-click and choose "save as" or "save link as.")

Voice of Tiffany Scheer, L&I communications manager: "Our goal here was really to propose rates that continue to be stable and predictable, especially during these difficult economic times. And we really think we've struck that balance with this modest increase."

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