The program that protects Washington workers if they’re hurt on the job is insolvent. Its promised payouts and other expenses add up to more than the sum of all of its assets, according to an audit of the state’s workers’ compensation program.
In November, voters defeated an initiative to allow private businesses to compete with the state program. I’m not interested in revisiting that battle. This is the system we have, and the voters have made it clear that it’s staying this way.
But as state Auditor Brian Sonntag’s Dec. 30 report made clear, workers’ comp is at financial risk. Something must be done to keep make it solvent.
Three steps that could help:
- Find money somewhere else to fill the gap.
- Hike workers’ comp rates — the auditor says a 17.8 percent increase would do the job.
- Save by cutting the benefits paid to injured workers.
The first two steps are already being taken. Despite massive budget shortfalls, the state is tapping $117 million from its trust fund this year to help with step one. Businesses also will pay more — they face an average rate hike of 12 percent this year, which would increase rates an average of $135.20 per full-time worker.
Cutting benefits while still protecting workers will be a challenging balancing act, and the effort to find that balance could spark some battles.
Gov. Chris Gregoire wants to reduce dependence on workers’ comp.
Today, people who are too sick or injured to work full time may avoid even part-time work because they don’t want to lose their benefits. Gregoire’s plan would allow seriously injured people to retain some benefits if they are able to make a limited return to the work force. It would also offer financial rewards to employers that hire injured people.
Since people injured on the job stay on workers’ comp longer in Washington than in any other state, Gregoire’s proposals seem like a good idea. Senate staffers are working on a fiscal review right now.
The Association of Washington Business believes the state should also cut overly generous benefits.
“We have the second-highest benefit costs per employee in the country,” said Kris Teft, AWB general counsel. “Our system pays benefits to more people, for longer duration, than anywhere else in the country.”
Teft is particularly concerned about workers’ comp “pensions,” lifetime payments to those who permanently leave the work force after an on-the-job injury. Washington is too loose in its definition of occupational diseases, he said.
“When occupational diseases were added to our statute in 1971, the principle was that there has to be proof that the disease is related to something that happened at work,” he said. A series of court rulings has relaxed the standards, and the AWB would like to tighten them up again.
Doing so could be politically tricky. So will any attempt at reform. If we allow the state’s workers’ comp program to continue to falter, however, the consequences for injured workers could be worse than the benefit cuts they face now.
Courtney Sherwood is The Columbian’s business and features editor. Reach her at 360-735-4561 or firstname.lastname@example.org.