L&I: The Only Grocer in Town
In the latest issue of Washington Business magazine, Jason Hagey emphasizes the need for workers' compensation reform and AWB's support for ending the Department of Labor & Industries' monopoly:
Washington’s industrial insurance system is headed for insolvency and needs reform, but lawmakers—feeling pressure from labor unions and trial lawyers—once again refused to act this year, as they have for the last decade. A frustrated business community has turned to the ballot initiative in hope of a solution.
To read the whole article about why small business owners are supporting I-1082, click here.The Time is Right for a Competitive Option in Workers’ Compensation
We’re out of step with the rest of the nation
Washington is one of only 4 states where the government has a monopoly on workers’ compensation. In 46 other states, employers can buy workers’ compensation from private insurers.
- Washington is one of only four states with a government monopoly that forbids private competition for industrial insurance coverage.
- While workers’ comp taxes are falling around the country, Washington is one of only a handful of states increasing taxes this year. Oregon has not increased rates in 20 years – and employers there are actually experiencing rate decreases in 2010.
- Washington has the second-highest cost per employee for workers’ compensation. We provide the third most generous benefit package in the nation. There’s no such thing as a high-benefit/low-cost system.
Our costs are too high
Administration Costs Up 82% in 10 Years
- Workers’ compensation tax rates are more than 50% higher than they were ten years ago.
- The Department of Labor & Industries’ administrative costs have increased 82% from 1999 – 2009.
- Although some studies claim to show Washington has comparatively low workers’ compensation costs, the Department admits they have intentionally adopted inadequate rates ~ and now the system is facing insolvency.
Our system is inefficient – and failing!
Time Loss Duration by State, 40% increase since 2001
- In Washington, the average injured worker with a time-loss claim misses 270 days of work – more than twice the national average. Oregon’s average time loss rate is about 70 days.
- Since 1990, claims have dropped by 52% – but costs keep rising.
- We have the highest pension rate in the nation. More than 50% of injured workers are likely to receive a pension from L&I if they’ve been off work more than two years. In fact, pension rates have increased more than 300% since 1996.
- A recent report from the State Auditor says our state’s Accident Fund faces a 74.4 percent chance of insolvency within two years. Within five years, the chance is 90%.
Employers need more choices
Five years ago, the West Virginia legislature passed a bill to transition their government-run workers’ compensation system into a competitive market. The result?
- claim protests have fallen 68 percent
- the overall appeals process has been streamlined resulting in claims disputes being resolved in a shorter period of time
- claimants have received better claim management by claims adjusters having fewer claims to manage
- overall premiums have dropped 30 percent, or more than $150 million
- 198 different workers’ compensation insurance companies have filed rates and forms
- More than 90 percent of all claims are ruled upon within 30 days.
If the goal of workers’ compensation is to assist injured workers in the best way possible while maintaining a competitive business environment, shouldn’t we look at examples where both are apparently taking place?
It’s time for Washington to Get Competitive.
Paid for by Save Our Jobs Washington, PO BOx 1909, Olympia, WA 98507
