"This proposal is part of a long-term plan to ensure steady and predictable rates, help injured workers heal and return to work, and reduce costs by improving operations," said Joel Sacks, director of the Washington State Department of Labor and Industries. "My goal is to reduce costs by an additional $35 million to 70 million in 2014."
The department's plan to cut costs includes helping workers return to work as soon as they are medically able, improving the claims processes, ramping up workplace safety, improving medical care and reducing long-term disability, and making it easy to do business with the department.
Sacks said he wants wage inflation to be the benchmark for the "steady and predictable rates" because workers' comp costs increase as wages increase. Washington's most recent wage inflation number is 3.4 percent. "However, because Washington's rates are based on hours worked and not payroll like other states, Washington needs to raise rates to get the revenue that other states get automatically," Sacks said.
Restoring the workers' comp reserves that were used "to hold down rates during the Great Recession" is also a part of the equation, Sacks said. An advisory panel of business and labor representatives agreed to a plan to restore reserves over the next few years.
By Nancy Grover
Read more at the WorkersComp Forum homepage.
October 28, 2013
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