L&I Proposes 2% Average Rate Increase for 2016

by Jan Himebaugh, BIAW Government Affairs Director

The Department of Labor and Industries has announced its proposed workers’ compensation rates for the 2016 calendar year.

According to L&I’s website:

“L&I’s rate-setting strategy is to ensure steady and predictable rates, free from large fluctuations benchmarked against wage inflation. The proposed 2% general hourly rate increase will help to steadily build the contingency reserves that will protect against unexpected large rate increases in the future, while collecting enough revenue to cover the costs of new claims that occur in 2016.”

The average increase will be 2% over 2015 rates, but each individual risk classification will see their rates increase or decrease based on the loss experience of their classification.

“Building Construction and Trades” as a category will see an average rate increase of 1%.  This translates into an additional $5 per year for the workers’ portion of premiums and an additional $65 per year that employers will pay.

Some construction risk classes will see significantly higher rate increases.  For example, Risk Class 0510, Wood Frame Building Construction (Framing), will see an increase of 7% or $116 more per year for workers and $510 more per year for employers.

The entire list of proposed rates by risk class can be found here:

http://lni.wa.gov/ClaimsIns/Files/Rates/Proposed_2016RatesBusTypeClassCode.pdf

While a 2% average rate increase seems to be a relatively small increase, it continues a seemingly never-ending trend of increased costs at L&I.  While many other states have seen rate decreases over the last several years, Washington’s expensive workers’ compensation system has continued to become even more so.

Efforts by BIAW and other business groups to reform Washington’s expensive and inefficient workers’ compensation monopoly have been thwarted by organized labor and the trial attorney lobby over the years and have resulted in Washington state remaining an national outlier in workers’ compensation costs, average timeloss days and other measurements of success.

We will continue to push L&I and the Legislature for common sense reforms that put us in line with other states and will reduce costs for employers and workers alike.  These include:

  • Allowing settlement agreements for all adult workers’ compensation claimants, not just those over age 50.
  • Changing the definition of “occupational disease” to cover injuries and conditions that are PRIMARILY caused by work.
  • Changing timeloss rules so that injured workers don’t earn more while on timeloss than they did while working.

Savings from these reforms alone would more than negate the need for rate increases, and would replenish L&I reserves beyond the goals that the agency has set.  All without charging an additional penny to workers or employers.

The agency will hold a series of public hearings where people can learn about and comment on the proposed rates. Locally, the hearing is scheduled for October 26 (10 am) at the NW Regional Training Center.

People can also comment in writing to Jo Anne Attwood, administrative regulations analyst, P. O. Box 41448, Olympia, WA 98504-4148; or email joanne.attwood@Lni.wa.gov. All comments must be received by 5 p.m. Nov. 3, 2015.

More information regarding the proposal is available at www.Lni.wa.gov/Rates. Final rates will be adopted by early December and go into effect Jan. 1, 2016.