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Home / Press Releases - 2002 / AWB Says 29 Percent Workers’ Comp Increase is Still Too Much: Applauds L&I Efforts to Reform System |
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AWB Says 29 Percent Workers’ Comp Increase is Still Too Much: Applauds L&I Efforts to Reform System |
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Written On: November 27, 2002 |
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Written By: Richard Davis |
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OLYMPIA (Nov. 27)---Even though the Dept. of Labor and Industries (L&I) heard the outcry from thousands of businesses from across Washington and lowered the workers’ compensation rate increase from 41 percent to 29 percent, Association of Washington Business President Don Brunell said it is still too high considering the fragile nature of the state’s economy.
Recognizing the shortfalls in state investment income projections and higher claim payments mandated by the state’s Supreme Court, employers argued for a smaller increase for next year. AWB argued for a 15 to 20 percent adjustment coupled with a major overhaul of the workers’ comp system. The 29 percent L&I rate hike announced on Wednesday will bring in $265 million of additional revenue for the workers’ comp system.
“Couple the slowness in the economy, along with the average 15 percent unemployment insurance increase, and the threat of higher state and local taxes to make up for city, county, port and state budget deficits, employers’ have a tremendous cumulative tax burden facing them in 2003,” Brunell said.
Brunell said, L&I, the Governor and legislature need to reform the state’s workers’ comp system. “The state Supreme Court has added a number of new costly benefits on employers. L&I heard the employers’ outcry and recognized those cost increases and recommends some changes which must be made in 2003.”
As part of the Wednesday announcement, L&I also said it will begin a series of initiatives to improve the performance of the workers’ comp system. These initiatives will fall into one of two categories; (1) Initiatives that require legislative approval to be adopted; and (2) Initiatives that can be implemented under the department’s standing internal policies.
The department says the legislative initiatives will be in the areas of hearing loss, vocational rehabilitation and calculation of wages.
AWB believes two major Supreme Court decisions need to be changed by the legislature. Both are raising havoc with employers who self-insure and those who must purchase their insurance from the state.
One decision is known as the Cockle Decision where the state Supreme Court set a precedent by mandating that employers calculate the costs of benefits in the workers’ comp payments when workers are off the job on what is called time-loss. Since all employers have different benefit programs with their employers, the court made it next to impossible for the state to calculate time-loss payments and added, on average, between 25 and 30 percent to workers’ comp costs.
In another costly decision, the Supreme Court said L&I must treat part-time workers as if they are employed full-time. That decision alone triggered higher time-loss payments, which are very costly to small businesses.
L&I asked the legislature to address both issues.
Finally, L&I is reviewing its internal policy on hearing loss. Many workers are applying for partial disabilities from hearing loss even though the hearing loss may not have occurred on the job.
“Paying for hearing aids is one thing, but indiscriminately awarding pensions is another and is driving workers’ comp costs through the roof,” Brunell said. That issue may require a legislative remedy as well even though AWB is hopeful L&I can address it with internal policies.
For more information on the rate increase, contact AWB’s Amber Balch at (360) 943-1600.
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