Washington Gov. Chris Gregoire announced that a partial “rate holiday” has been finalized by the Department of Labor and Industries, designed to save workers and employers about $315 million in workers’ compensation insurance premiums.
According to L&I, beginning July 1, employers and workers will not pay the Medical Aid Fund premium for work performed from that date through Dec. 31, 2007. On average, the savings will represent about 34 percent of total premiums paid into the workers’ compensation system for work performed in the second half of the year. Because employers and workers pay equally into the Medical Aid Fund, both will benefit equally, L&I said.
Combined with this year’s overall 2 percent decrease in workers’ compensation rates, which L&I adopted in December, employers and workers will pay about $346 million less in premiums in 2007. The rate holiday is temporary and will end Jan. 1, 2008.
“In the global economy, we need to do everything we can to create and retain family-wage jobs by recruiting businesses to our state and helping existing businesses to expand,” said Gov. Gregoire. “The rate holiday will help businesses, and will also put money into the pockets of workers.”
L&I Director Judy Schurke said a number of factors made the rate holiday possible.
“Our investment returns are higher than we expected, and we have had good success at controlling health-care costs,” Schurke said. “In addition, employers and workers continue to improve workplace safety, which reduces what we pay out in benefits to injured workers. All this means we can use some of the money to reduce premiums for our customers.”
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