Washington Workers’ Comp Rate Proposal Delayed

September 17, 2010

Washington’s Department of Labor & Industries (L&I) announced that it will propose workers’ compensation rates for 2011 in November after the results of the fall election and the outcome of Initiative 1082 — instead of making its traditional rate recommendation in September.

Initiative 1082 would allow private insurance carriers to write workers’ compensation insurance in Washington. According to L&I, if passed, one feature of Initiative 1082 would be effective immediately and would change Washington’s workers’ compensation system for determining premium rates. The current system calculates rates based on hours worked. If the initiative passes, employers would pay premiums based on a rate for every $100 of payroll they pay workers.

Given that potential change in the rate calculation, L&I Director Judy Schurke noted that until the election results are available, L&I will not know which method to use to accurately calculate rates for 2011. “To be most fair to businesses, our rates proposal needs to be based on the decision that voters make on November 2,” she said.

L&I also reported that it continues to analyze data that can affect the rate they estimate is needed to pay the cost of claims that occur in 2011. The economic recession has significantly changed the amount of work being done by different industries. For example, employment in construction, a higher cost industry for workers’ compensation, has dropped by almost 30 percent. L&I is considering how this and other changes impact the lifetime costs of disability claims which must be considered in establishing rates.

While L&I has historically proposed rates for the upcoming year in September, there is no statutory requirement to do so. After the results of the election are known, L&I will immediately take steps to implement rates based on the outcome of the initiative, and on projections of the revenue needed to cover the costs of injuries that occur in 2011.

Was this article valuable?

Here are more articles you may enjoy.