By Elise Linscott
This year, workers’ compensation insurance premiums could rise an average of 2% in the state of Washington, the Washington State Department of Labor & Industries (L&I) announced late September.
The L&I takes a close look at expected workers' compensation payouts, the size of the reserve fund, wage inflation and other financial indicators to determine the proposed base premium rate. The agency is also working to cut costs to help keep rates as low as possible.
“Washington’s work to create safe workplaces to avoid worker injuries in the first place has a huge impact on claims costs,” an L&I spokesperson said in an email this week. “Trends show an improvement over the last two decades in workplace safety. Additionally, the state passed legislation in 2011 that is helping improve outcomes for injured-workers and reduce costs. On top of safety and reforms, return on investments is also helping keep premium rate adjustments at a minimum. L&I’s goal is to keep rate adjustments steady and predictable, benchmarking against wage inflation.”
The 2% increase is only a proposal at this point, and final rates will be adopted by early December to go into effect Jan. 1, 2016.
The 2015 average rate increase was 0.8% and the 2014 average rate increase was 2.7%. In 2012 and 2013, the average rate increase was 0%. L&I held the average rate down, drawing from the contingency reserves to cover liabilities to support premium payers during the recession, an L&I spokesperson said.
In the last few years, L&I has worked to create new programs that help cut operating costs.
“In addition (to other programs and improvements), L&I has focused on return-to-work efforts including a new Stay at Work program that provides financial incentives to employers who support injured workers with light-duty jobs during recovery. The workplace connection is critical in helping injured workers’ recover and in reducing long-term disability which impacts compensable claim costs.
“Additionally, the agency improved claims management processes to ensure injured workers and employers receive services quickly. For example, new initiatives to reduce delays in vocational counseling services and for contacting workers early in a claim so they understand their role in healing and returning to work have resulted in quicker claim resolution. Together, these changes have reduced claim liability estimates by hundreds of millions of dollars,” the organization said.
The L&I will be taking community input through Nov. 3.
