L&I Proposes Decrease in Workers’ Comp Rates for 2018

The average amount employers pay for workers’ compensation insurance in Washington would drop 2.5 percent in 2018 under a proposal from the State Department of Labor & Industries (L&I).

If the proposed decrease is approved, Washington employers, as a whole, would pay $67 million less in premiums. Individually, employers would pay an average of $34 less each year per employee for workers’ compensation coverage. Current L&I initiatives to help injured workers recover quickly and reduce workers’ compensation costs have improved workplace safety tremendously. As a result, both employers’ and workers’ focus on safety has led to fewer accidents and helped to create a positive business climate in Washington State.

“We’ve made some very positive steps with our initiatives to help people who are hurt on the job recover and start working again. These and other workplace safety and health improvements have allowed us to build our reserves, while at the same time propose a cut to the average premium rate employers and workers pay. It’s a win-win.”
Joel Sacks, director, Washington Department of Labor & Industries[1]

L&I is the state’s primary workers’ compensation insurance provider, covering about 2.8 million workers, 180,000 employers, and accepting more than 90,000 claims per year. Both employers and employees pay into the workers’ compensation system to contribute to the cost of providing wage and disability benefits, including medical treatment of injuries and illnesses. In addition, the premiums provide wiggle room by guaranteeing reserves are available to cover unexpected events, such as a natural disaster or downturn in the economy. In the last five years, the average annual workers’ compensation rate increase has been less than one percent. If adopted, this will be the first decline in the hourly rate since 2007.

L&I determines the proposed rate for the following year each fall by carefully looking at expected workers’ compensation payouts, the size of the contingency reserve, wage inflation, and other financial indicators. L&I currently has multiple initiatives in progress focused on lowering costs due to improved outcomes for injured workers. These initiatives include: promoting workplace safety, ensuring injured workers receive quality health care, providing vocational services to workers, and supporting employers who want to keep injured workers actively working. In the past four years, these improvements have resulted in a reduction of over $1.7 billion in projected long-term costs for the workers’ compensation system.

More information about this year’s proposal is available at www.Lni.wa.gov/Rates.

[1] http://lni.wa.gov/News/2017/pr170920b.asp

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