L&I proposes workers’ comp rate increase for 2016

The Washington State Department of Labor & Industries (L&I) is proposing a 2 percent (average) rate increase on workers’ compensation insurance for 2016. The department sets workers comp rates every fall for the following year.

The proposed increase comes out to a little more than 1 cent per hour worked, the department said. Proposed rates are based on expected workers’ compensation payouts, the size of the reserve fund, wage inflation and other financial indicators.

“When workers’ compensation rates are like a roller coaster ride, it frustrates everyone. We’re not going to do that,” said L&I Director Joel Sacks. “I’m committed to keeping rates steady and predictable. 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. Still, this small increase will help build the reserve funds needed to keep our program financially healthy.”

Workers’ compensation premiums help cover the cost of providing wage and disability benefits, as well as medical costs for treatment of injuries and illnesses. The reserve fund protects the system against the unexpected.

Last year, L&I covered nearly 90,000 work-related injury and illness claims in our state.

The Association of Washington Business (AWB), the state’s largest business organization, was quick to issue a statement after hearing of the proposed rate increase. A portion of the statement, by AWB President Kris Johnson, read:

“Today’s proposal to once again raise employers’ workers’ compensation insurance rates by 2 percent, or nearly double what the department needs to break even, is yet another illustration of the need for efficiencies and reforms within the single-option system.”

The agency will hold a public hearing in Vancouver on Monday, October 26 where people can learn about and comment on the proposed increase. The hearing will take place at 10 a.m. at the NW Regional Training Center (11606 NE 66th Street, Suite 103).

The final rate decision will be announced by early December.

For more information regarding the proposal, visit www.Lni.wa.gov/Rates.

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