A workers’ compensation rate increase may be in store for Washington for 2012.
The state’s Department of Labor & Industries (L&I) on Monday asked the Workers’ Compensation Advisory Committee for input on restoring the workers’ compensation reserve funds, which have been drawn down during the recession. L&I is seeking the committee’s comments on a rate increase for 2012 ranging from 4.5 to 8 percent.
The WCAC, which is comprised of business, organized labor, self-insured employers and the Board of Industrial Insurance Appeals, meets quarterly to advise L&I on topics including budget issues, policy, new programs and insurance rates.
Workers’ compensation reforms passed by the Legislature earlier this year will save $1.1 billion over the next four years, and the resulting savings place the indicated or break-even rate for 2012 for workers’ comp premiums at a negative 0.3 percent, according to L&I. Without the reforms, the break-even rate for 2012 would have been an 8.1 percent increase, the L&I states.
L&I drew down its contingency reserves by $332 million over the last three years to hold down rate increases for employers and workers during the recession.
At Monday’s meeting, L&I actuaries told the WCAC that Washington’s current reserves are low by industry standards. For every dollar held in reserves by other public industrial insurers, Washington has 20 cents in reserve.
‘On Tuesday, Sept. 20, we want to announce a proposed rate increase,’ said Renee Guillierie, an L&I spokeswoman. ‘We have asked for prudent increase for rebuilding the reserves.’
L&I has asked WAC members to contact L&I individually and offer their thoughts by Thursday, Guillierie said. Taking a higher rate increase in 2012 will restore the reserves faster and lead to lower rate increases in the future, according to L&I.
Public hearings will be held October to solicit comments, and ‘we will announce a final decision on the rate increase in December,’ Guillierie said.
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