Pain Points for WA’s Proposed Workers Comp Rate Increase in 2014
September 18, 2013
News about the rapid recovery from the recession is filling the airwaves, but some Washington businesses are not celebrating. Businesses are still gauging the effects of wage hikes, mandatory sick leave, and Obamacare. Now, Washington Labor and Industries (L&I) is raising workers’ compensation premiums by a proposed 2.7% in 2014. This may affect overall business growth in Washington.
L&I has kept rates steady for the past three years and some government officials say that it is high time to raise rates. They point to California, which is hiking rates by 7% in 2014. They estimate that the Washington increase will be less than 2 cents per hour for each worker.
L&I officials cite similar benefits of this rate increase as they have in previous actions: create revenue, reduce costs by $30 to70 million, then use the money to improve operations and ease the ability of injured workers to use benefits. These issues have plagued L&I in the past, as they are a state-run program with a history of budgetary and operational shortfalls. Washington is one of only four monopolistic, state-run systems in the nation.
L&I Director Joel Sacks set the stage for possible future hikes by saying, “This proposal is part of a long-term plan to ensure steady and predictable rates…”
Though many states besides California are raising rates as well, other states are lowering premiums. Oregon rates are plummeting by a proposed 7.6% in 2014. This is fueled by a growing building sector and a private workers’ comp system that promotes competition between insurers.
Though Washington employment and overall economic recovery is outpacing the national average, some businesses are recalculating their projected growth in 2014 to compensate for the rate hike. It is our sincere hope that this rate increase does not hamper recovery or hiring next year.
Also, check out this article Eight Components of an Effective Workers’ Compensation Program. If you have any questions, feel free to contact me.
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