Stock Gains Ease Worker’s Comp Rate Employers Will Get Break Of 27 Percent

Washington business owners and their workers will receive a 27 percent reduction next year in the premiums they pay for state accident and medical insurance.

The Washington Department of Labor & Industries said Thursday that whopping returns from investments it made in the stock market will enable the agency to grant a one-time dividend of $200 million, beginning April 1, 1996. The cut will benefit 153,000 businesses and 1.7 million workers who are covered by worker’s compensation, an insurance plan managed by L&I.

“It’s our Christmas present to the business and working community in Washington,” L&I director Mark Brown said.

The cut will save the average company $135 in 1996; the average full-time employee, $37.

Savings from the cuts will range from $14 for school volunteers to $3,401 for shake-mill operators. The amount of savings depends on each company’s accident and medical claims experience and the worker’s job classification.

Home builders could save $830; truckers; $735; auto mechanics, $249; restaurant workers, $111; doctors, $54; clerical workers, $32.

The cut, which affects only 1996 rates, comes after a previously announced 10 percent discount in premiums that takes effect Jan. 1. That permanent reduction was a result of a statewide drop in claims and a slowdown in health care inflation.

The latest dividend is a result of L&I’s Wall Street investments. The agency invests a portion of the Washington State Fund, from which worker’s compensation claims are paid. Brown said the agency sinks 11 percent of its $6.2 billion insurance reserve fund into stocks. The investment will reap nearly $200 million this year.

“If we don’t need the money to pay bills or invest in future costs, we have no justification for keeping it,” Brown said.

But some Spokane business owners believe L&I is a grinch in Santa’s clothing. Mike Saad, owner of Dana-Saad Co., a plastic parts and electronics manufacturer in the Valley, said the agency has overcharged businesses for years by forcing all but the largest companies to pay into the state fund.

“They talk about it being premium, but that’s a bunch of baloney. It’s a tax,” said Saad. “If a claim is made, they come back to the employer and make them pay for it” with higher rates.

Brown said that’s untrue. Premiums occasionally are raised in anticipation of an increase in accidents and claims, not to penalize a company for making a claim, he said.

, DataTimes