Workers’ comp rate won’t rise
OLYMPIA — State officials will not order a general rate increase for Washington’s workers’ compensation insurance, the Department of Labor and Industries said Thursday.
Officials had proposed an average rate increase of 3.8 percent in late August. But the strong economy and investment earnings, along with favorable medical costs and low injury rates, make that unnecessary, agency Director Gary Weeks said.
“We heard from business owners this fall that they wanted rates as low as possible,” Weeks said in a statement.
The state-run system includes an accident fund that pays partial wage-replacement and disability checks for injured workers who can’t return to the job.
Employers who pay into that fund will see its premiums rise, but officials said the increase will be offset by lower rates in funds for medical aid and supplemental pension.
The state covers some 161,000 employers along with 2.3 million workers, who cover about a quarter of their own premiums.
The rate for this year represented a 3.7 percent increase over the 2004 rate.
Businesses are required to participate in the workers’ comp program, which acts as a state-run insurance program offering assistance to employees hurt on the job. It differs from the state’s unemployment program that seeks to bridge a workers’ financial needs between jobs.
To fund the workers’ comp program, businesses are taxed by the state according to a formula that includes injury risk.
General rate increases announced each fall are statewide averages. For example, logging companies pay substantially more in workers’ comp insurance than, say, department stores.
L&I came under fire three years ago for hiking the general premium by 29.5 percent, followed in 2004 by a nearly 10-percent increase. The agency noted at the time that it hadn’t raised its general premium in the previous eight years. But the rate hikes drew heavy criticism from businesses battling a down economy, who charged that the agency wasn’t run efficiently.
Carolyn Logue, the Washington state director of the National Federation of Independent Business, said that L&I’s Thursday announcement was “great news.”