Washington Agency Proposes Small Increase in Workers’ Comp Rates for 2017

September 23, 2016

The rate paid for workers’ compensation coverage in Washington would rise by an average of 0.7 percent next year under a proposal released by the Washington State Department of Labor & Industries (L&I).

Last year, L&I covered nearly 93,000 work-related injury and illness claims in our state.

L&I sets workers’ compensation rates every fall for the following year. To determine the proposed rate, the agency takes a close look at expected workers’ compensation payouts, the size of the reserve fund, wage inflation and other financial indicators.

“We’re doing our best to make sure we have a workers’ compensation system in our state that’s healthy and available for workers and employers today and in the future,” said L&I Director Joel Sacks. “By helping injured workers heal and get back to work sooner, we’ve been able to keep rates steady and predictable.”

The proposed 2017 increase would cost employers an average of about $10 more a year per employee. Workers on average will not see an increase in what they pay. If the new proposal is adopted, the average annual workers’ compensation rate increase over the past six years will be just over 1 percent.

Workers’ compensation premiums help cover the cost of providing wage and disability benefits, as well as medical treatment of injuries and illnesses. They also provide a safety net to make sure the system is prepared for the unexpected.

Helping injured workers and lowering workers’ compensation costs

The agency has several initiatives underway that are lowering workers’ compensation costs by focusing on better outcomes for injured workers. Reducing costs helps control rate increases. Over the last three years, the agency reported these and other improvements have resulted in a more than $700 million reduction in projected long-term costs for the workers’ compensation system.

As wages and medical costs climb, the cost of providing workers’ compensation coverage rises. System improvements by L&I have allowed the agency to pass along just a portion of those increased costs to employers and workers. In other states, workers’ compensation cost increases as a result of wage inflation are automatically passed along to employers without any changes in their rates.

“Keeping rates steady and avoiding major swings makes it easier for employers to budget for their workers’ compensation costs. At the same time, these small rate increases help build the workers’ compensation fund so we’re ready in case there are bad times,” said Sacks.

The agency will hold a series of public hearings where people can learn about and comment on the proposed rates. People can also comment in writing to Jo Anne Attwood, administrative regulations analyst, P. O. Box 41448, Olympia, WA 98504-4148; or email joanne.attwood@Lni.wa.gov. All comments must be received by 5 p.m. Nov. 8, 2016.

Source: Washington Department of L & I

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