Workers currently receiving Washington workers’ compensation wage-replacement or pension benefits will receive a 5.018 percent cost-of-living increase, according to the state Department of Labor and Industries (L&I). State law requires that benefits be recalculated each year to reflect the change in the state’s average wage from the previous calendar year.
Also increasing will be the amount L&I pays for a permanent partial disability (PPD). That annual increase is based on the change in the Consumer Price Index. PPD awards will rise 2.88 percent for workplace injuries incurred July 1 and beyond. PPD awards go to workers who have lost a body part or suffered a permanent, disabling injury.
Under Washington’s workers’ compensation system, injured workers receive from 60 percent to 75 percent of their income, up to the legally set maximum, tax free, while they are off the job and recovering. The percentage of income is based on their marital status and number of dependents. For workers injured in 2007, the average monthly time-loss paid was about $1,749.
The recalculation of benefits is based on the average annual wage of all workers in Washington. That wage, calculated by the Employment Security Department, rose to $44,721 in 2007, an increase of 5.018 percent from 2006.
As a result, the new maximum monthly benefit will be $4,472.10, or 120 percent of the state’s average monthly wage, for workers injured after June 30, 1996. Less than 2½ percent of L&I claimants receiving wage-replacement benefits collect the maximum.
Maximum benefits differ depending on when an injury occurred because, in 1996, the state Legislature increased the percentage of the state’s average wage used to set the maximum benefit level.
Time-loss payments partially compensate workers for lost wages due to a job-related injury or illness. Pension benefits are paid when a work-related injury or illness causes a worker to be totally and permanently disabled. Pensions also are paid to a worker’s surviving spouse and dependent children when a workplace accident or illness results in death.
The July 1 increase applies to both State Fund and self-insured employers.
Also, L&I has begun mailing dividend checks this week to 100,000 employers as the final step of a process to return excess funds from the state’s workers’ compensation system. Another 28,000 employers will receive credit toward their next workers’ compensation premiums. The remaining 11,000 employers will have their dividends applied to premiums already owed or other debts.
“L&I strives to make sure no individual or group pays more or less than it should for workers’ compensation insurance,” said Director Judy Schurke.
“Last year, employers and workers enjoyed a partial workers’ comp rate holiday,” she explained. Employers and workers saved more than $300 million in workers’ compensation premiums by not having to pay Medical Aid fund premiums during the second half of 2007.
To complete the rate holiday, employers who did not participate in L&I’s Retrospective Rating Program are also entitled to a one-time dividend. (Retro employers receive their proportionate share through their retrospective rating assessments.)
The dividends will total $37 million, and dividends will average $266 per employer. How much an individual employer receives will be based on the Accident Fund premium he or she paid in the second half of 2007. Checks will be sent to 100,000 employers in amounts ranging from $10 to several thousand dollars. About half the checks will be between $10 and $100. Another 28,000 employers will have their next-quarter premiums credited.
About 11,000 employers who owe workers’ comp premiums or may otherwise have a debt with L&I or other agencies may see their dividends applied to those debts rather than receive a check directly. An employer will be notified if a dividend is applied to debts.
More information is available on the L&I Web site at http://www.lni.wa.gov/ClaimsIns/Insurance/RatesRisk/RateHoliday/Default.asp.
Source: L&I
Topics Commercial Lines Workers' Compensation Business Insurance Washington
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