September 19, 2012 in Opinion

Editorial: Reforms easing workers’ comp burden, but tweak needed

 

Washington businesses and their employees got welcome news Monday: Workers’ compensation premiums will not increase next year.

That’s the second time the Department of Labor and Industries has been able to keep rates flat since the 2011 Legislature adopted reforms to workers’ comp and unemployment insurance.

The reforms included a freeze on cost-of-living increases, help returning injured workers to lighter duty, more-efficient claims management, and expansion of Centers of Occupational Health Education that have held increases in medical costs to 4 percent since the middle of 2011, with the expectation that trend will continue through 2013.

Spokane-based Inland Northwest Health Services, a COHE pioneer, now has more than 1,200 participating health care providers in Eastern Washington. Using training and treatment methodologies developed by the COHEs, L&I will develop a network of more than 10,000 providers to expand the use of best practices for rehabilitating injured workers.

That should save more money.

Some savings reflect fewer claims from injured construction workers, thousands of whom are sidelined by the slump in building.

But the most controversial 2011 reform, optional structured settlements for injured workers 55 and over, has so far been a disappointment. As many as 3,000 applications had been expected; only 250 were filed. Of those, 203 were withdrawn.

The settlements substitute lump sums for years of ongoing payments that represent the bulk of all workers’ comp costs.

Meanwhile, where unemployment premiums might go next year will not be known until early December. They fell 13 percent for 2012.

The workers’ comp and unemployment reforms have saved employers and workers far more than was projected.

In its first year, for example, businesses paid $300 million less in unemployment premiums than would have been the case without reforms. Rates for more than 77,000 employers with no layoffs the previous four years – an extraordinary record during a recession – imploded by 71 percent.

The workers’ comp reforms had been expected to save $1.1 billion in the budget biennium. The actual figure will be closer to $1.5 billion.

That lifts the total savings to employers and employees – who pay a portion of workers’ comp premiums – to more than $600 million, with additional savings of perhaps $200 million expected next year in unemployment premiums.

One other benefit: Workers’ comp reserves will increase $82 million despite the rate freeze, further removing the threat of insolvency, a danger perilously close according to a December 2009 independent audit.

Voters in 2010 rejected private competition for the state’s monopoly on workers’ comp. The reforms have taken the pressure off the system, but the weight will not be truly lifted until lump-sum payments can be structured in a way that makes them more attractive and accessible to younger workers.

To respond to this editorial online, go to www.spokesman.com and click on Opinion under the Topics menu.


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