The Washington State Department of Labor & Industries announced Wednesday that it is proposing an average 2 percent increase in workers’ compensation rates for 2016, saying the increase in insurance rates is due to rising wages and health care costs.
The workers’ compensation system serves about 2.6 million workers and nearly 170,000 employers by covering claims for work-related injuries and illness. Last year, L&I covered almost 90,000 such claims. The system covers the costs of providing wage and disability benefits, as well as medical costs for treatment of injuries and illnesses.
The rate increase proposal comes as part of an annual rate review by L&I, which uses wage inflation as a benchmark to help determine rates for the coming year. Washington’s most recent wage inflation number is 4.2 percent. Increases in the base premium are based on expected workers’ compensation payouts, the size of the reserve fund, wage inflation and other financial indicators, according to L&I.
The state agency characterizes the proposed increase as a little more than 1 cent per hour worked.
“We’ve worked hard to decrease the costs of running the program, which is one of the reasons we can propose a rate increase that’s well under the wage inflation rate,” said L&I Director Joel Sacks in a news release. “Still, this small increase will help build the reserve funds needed to keep our program financially healthy.”
The Association of Washington Business, a statewide business advocacy organization, immediately criticized the proposed rate increase.
“Employers are concerned not only about the years of unnecessary workers’ compensation rate increases, but also the message that it sends — a message that government fails to appreciate that our economy is still fragile and that while economic recovery has come to parts of the Puget Sound region, it has not arrived in all parts of the state,” said association president Kris Johnson. “Employers understand the need for a robust program that helps injured workers, but every unnecessary cost only hampers their ability to expand their operations, hire more Washingtonians and raise wages at a time when these are the exact things our state’s economy needs to experience a full recovery.”
L&I will hold a series of public hearings to receive public comment. The Vancouver hearing will be at 10 a.m. Oct. 26 at the Northwest Regional Training Center, 11606 N.E. 66th Circle, Vancouver.
Written comments can be sent to Jo Anne Attwood, administrative regulations analyst, P. O. Box 41448, Olympia, WA 98504-4148; or joanne.attwood@Lni.wa.gov.
All comments must be received by 5 p.m. Nov. 3. Final rates will be adopted by early December and go into effect Jan. 1.
More information regarding the proposal is at www.Lni.wa.gov/Rates.