Even though workers compensation rates are going up an average of 7.6% this year and with the strong likelihood they will skyrocket into double digits in 2011, union officials said they don't want the legislature to take corrective action this session.
Erik Smith, a writer for the Washington State Wire, reported: "The state’s labor organizations say they aren’t going to compromise with business on worker’s compensation – and if that means a showdown at the ballot box this fall, so be it. Rick Bender, Al Link and Jeff Johnson of the Washington State Labor Council, AFL-CIO delivered that message to the media in an Olympia press conference yesterday.
Even though Democrat legislative leadership and Gov. Gregoire indicated they are reluctant to sponsor worker comp reforms this session, AWB and an employer coalition, will push a package of reforms this year. AWB's bill has three main features, all aimed at reducing costs, treating injured workers fairly and eliminating fraud.
AWB Bill Necessary to Prevent Large Tax Hike in 2011
Briefing, the bill's provisions would:
- allow self-insured employers and the Dept. of Labor and Industries (L&I) to establish managed care networks to deal with injured worker claims. Though workers would still be able to choose their own doctors, the networks would deal with everything else and the fees would be negotiated in advance.
- require workers to prove their injuries were job related.
- allow employers to make lump-sum settlements with injured workers.
(See Kris Tefft's article in the most current issue of Washington Business Magazine).
Union leaders also threw down the gauntlet on the possibility of an initiative allowing private insurance companies to write workers comp coverage as they do in many other states. Noting that the Building Industry Association of Washington has threatened to run an initiative this year if the Legislature doesn’t act on its private-competition measure, Bender, state labor council president, said bring it on."We don't think they're going to be successful in their three-way bill, and we are preparing for a ballot fight on private competition."
Auditor's Report Justifies Urgency of Acting in 2010
The legislature and Governor need to act this year. An actuarial firm contracted by the state Auditor's Office to study the system has concluded that the state accident fund -- one part of the system -- has a nearly 75% chance of becoming insolvent in the next two years. And this is after the rate hike this year. Without the increase, the odds would have been more than 82%, according to the report by Towers Perrin.
The fund's reserves were at a mere $63 million at the end of the last quarter, down almost three-quarters of a billion from $776 million at the end of 2008. In order to remain solvent, the accident fund would need a 33% increase, Towers Perrin estimated.
Time is of the essence. Action is needed NOW, not after the legislature folds up its 2010 session and lawmakers head home to run for re-election.
Don C.Brunell, President (DonB@awb.org)
