Washington: Workers' compensation premiums increasing by 3 percent, officials say
Officials said insurance actuary calculations -- based on anticipated injured worker claims next year and on wage and medical inflation -- indicated the need for a 6.3 percent premium increase, which would have generated $119 million for the state. However, the DL&I made the decision to implement a 3 percent increase that will generate $57 million, with the contingency reserve absorbing the remaining $62 million. Individual employers could see their rates go up or down, depending on their recent claims history and any changes in the frequency and cost of claims in their industry.
"We recognize the difficult economic environment for business and workers and wanted to limit the increase as much as possible," said Judy Schurke, director of the DL&I.
As part of the state's economic stimulus package, Schurke said the department will be working with business and labor and the governor to evaluate whether more can be done in 2009 to help businesses survive and workers stay employed.
"We want to do everything we can in the short term to help businesses and workers weather the economic recession," she said.
With the 3 percent increase, average premiums will jump by approximately 2 cents per hour worked. The 2009 rate tables by industry are available on the department's Web site.
Three funds will increase rates. Washington's workers' comp system, the eighth largest industrial insurance system in the United States, is made up of three funds that provide benefits when workers are injured on the job. Schurke said the Accident Fund rate will increase 1.8 percent. Employers pay premiums into this fund. The Medical Aid Fund rate will go up by 3.2 percent, and the Supplemental Pension Fund rate will increase 7 percent. Employers and workers contribute equal premiums into the latter two funds.
Schurke noted that the system's contingency reserve has dropped from $1.6 billion in September to approximately $990 million in the volatile markets. All workers' comp insurers maintain contingency reserves. Washington's contingency reserve has one of the lowest ratios of reserves to liabilities. It currently is 9.7 percent of the total liabilities, which now stand at $10.2 billion.
January 8, 2009
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