Washington Prepares for Workers’ Comp Rate Increase

A workers’ compensation rate increase may be in store for Washington for 2012. A final decision is expecetd in December.

The state’s Department of Labor & Industries (L&I) has asked the Workers’ Compensation Advisory Committee for input on restoring the workers’ compensation reserve funds, which have been drawn down during the recession. L&I is seeking the committee’s comments on a rate increase for 2012 ranging from 4.5 to 8 percent.

Workers’ compensation reforms passed by the Legislature earlier this year will save $1.1 billion over the next four years, and the resulting savings place the indicated or break-even rate for 2012 for workers’ comp premiums at a negative 0.3 percent, according to L&I. Without the reforms, the break-even rate for 2012 would have been an 8.1 percent increase, the L&I states.

L&I drew down its contingency reserves by $332 million over the last three years to hold down rate increases for employers and workers during the recession.

L&I actuaries told the WCAC that Washington’s current reserves are low by industry standards. For every dollar held in reserves by other public industrial insurers, Washington has 20 cents in reserve.