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Home / Washington Business - March/April 2004 / Insider Perspective - Amber Balch Carter on Reforming Workers’ Comp |
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Insider Perspective - Amber Balch Carter on Reforming Workers’ Comp |
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Written On: March/April 2004 |
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Written By: By Scott Carlson |
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“On January 1, a 9.8 percent average workers’ compensation rate increase went into effect,” said Association of Washington Business Governmental Affairs Director Amber Balch Carter. “The good news is it’s 50 percent less than initially proposed. The bad news is it’s still a 9.8 percent rate increase during economic times that are very shaky.”
Amber has been lobbying to reform the workers’ comp system for more than a year now and has gained a significant amount of ground in that short time, including the hearing loss bill passed during the 2003 legislative session.
“While significant, it was short of the reforms that were necessary to protect all of the compensation systems from further damage,” she said.
“Reform First!” has been the rallying cry of Amber and the league of businesses behind the AWB-led assault on the broken Department of Labor and Industries (L&I) system. But is L&I listening to the astounding majority of businesses asking for a break from its skyrocketing fees?
During the rate increase process, AWB asked L&I to apply Governor Gary Locke’s Priorities of Government (POG) process to the workers’ comp system. AWB hoped the agency would be able to find more efficient means of doing business, keeping burdensome taxes and fees off the shoulders of employers around the state. In addition, AWB asked L&I to work with the business community to reduce the need for future rate increases by making specific reforms to workers’ comp.
AWB also requested that L&I alter their schedule for rate increase implementation.
“L&I has the flexibility of law to adopt rates annually or as they deem appropriate,” said Amber. “Given the current economic times and the need to implement savings and find greater efficiencies, we felt it appropriate for the agency to adjust its rate adoption schedule.”
At the given rate increase schedule of one major annual hike, scores of businesses could be forced to close their doors.
“AWB has argued that the agency has not initiated enough reform from the prior year’s rate increase to allow us to support this year’s increase,” Amber said. “Go back two years ago. They asked for a 45.6 percent rate increase, but settled for a little more than half of that.”
According to Amber, the current administration is devoting time and effort to reforming other state-run activities, but doesn’t appear to have the same interest in improving the workers’ comp system.
“We started this fall with a proposed 19.4 percent rate increase from L&I, but because they had not worked with us either legislatively or within their own administrations to find enough reform to prevent the need for a future rate increase, we came in this year with the same message – Reform First!”
According to Amber, the increase is particularly troubling this year because L&I did not take the appropriate steps two years ago when possible increases were first being discussed. Amber faults L&I for not working with the legislature to prevent the need for rate increases.
At the time the first rate increase was being considered, Governor Locke and his fiscal advisors were drafting the POG, talking about “living within your means,” and working hard on a budget that reflected those thoughts.
“It was very frustrating that the agency did not follow suit with the rest of the administration in regards to the mentality of efficiency, living within your means to prevent the need for rate increases, during such hard economic times,” she said.
AWB is working steadfastly on bring about reforms to L&I and the workers’ comp system.
AWB’s suggestions for reform:
• Improving the current time loss benefit formula by making it more predictable and reasonable, and by removing disincentives that encourage some claimants to remain on disability when return-to-work options are available and appropriate (e.g. seasonal workers who can earn more on disability than working).
• Establishing a more equitable annual index for time loss benefits that more accurately reflects changes in the cost of living.
• Reducing the administration costs involved in paying time loss benefits.
• Keeping Washington employers competitive while continuing to provide excellent benefits for their workers.
“We’d like to help employers recover from this recession. The additional imposition of tax premiums isn’t going to help,” Amber concluded.
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