Historic changes to workers' compensation

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Washington employers who provide temporary work that allows an injured worker to “Stay at Work” while recovering from an injury will be eligible to be reimbursed for half of the worker’s wages.

This new program is part of the historic workers’ compensation reform bill (House Bill 2123) signed by Governor Chris Gregoire on June 15, 2011.

“The Stay-at-Work Program is so important because it helps employers keep their valuable, experienced workers,” said Judy Schurke, director of the Department of Labor & Industries. “And workers don’t lose the income they would if they were off the job collecting partial wage-replacement benefits.”

Keeping an injured worker in a light-duty job while they recover also helps employers avoid significant increases in their L&I premium rates.

Another key provision in the new legislation is an option for injured workers who are age 55 and older to negotiate a settlement agreement with periodic payments instead of staying in the workers’ comp system or participating in retraining. Workers who opt for a settlement agreement will still be able to get medical treatment for their workplace injuries or diseases.

Schurke said settlement agreements may be a good option for older workers who need financial help for a short time after an injury and don’t want to retrain for a new career.

Features of the new legislation include:

Stay-at-Work Program

L&I’s new Stay-at-Work program will offer financial incentives to employers who provide transitional, light-duty jobs to their recovering workers. The program began on June 15, 2011, and is part of a larger effort to speed worker recovery, prevent long-term disability, and reduce costs for everyone. Under this program, employers are eligible to be reimbursed for one-half of the injured employee’s wage while doing the transitional job.  Reimbursements also are available if the worker needs any specific tools, clothing or instruction to do the transitional job. Learn more about the Stay-at-Work Program.

Cost-of-Living Adjustment (COLA) freeze

As part of the changes for injured workers, the 2011 Legislature froze this year’s Cost-of-Living Adjustments (COLA) for both time-loss compensation and pension benefits to ensure parity with other programs where benefit increases have been suspended. This one-year COLA freeze is in effect from July 1, 2011 to June 30, 2012. Learn more about the COLA freeze.

Structured Settlement Compensation Option

Eligible injured workers 55 and older will have the opportunity to resolve their claim by negotiating an agreement with their employer and the department (for those insured with L&I). Agreements will provide periodic payments and must be approved by the Board of Industrial Insurance Appeals. This provision is not available until January 1, 2012. Learn more about the Structured Settlement Compensation Option.

Safety and Health Investment Project (SHIP) Grants

SHIP grants were created by the state legislature in 2007 to promote cooperation between labor and business on innovative approaches to workplace safety. The new legislation makes the grant program permanent and specifies that 25% of the grants go to projects developing innovative return-to-work programs for injured workers, and 25% to projects addressing the needs of small businesses. Learn more about the SHIP Grants.

Rainy Day Fund

The legislation creates a new workers’ compensation trust fund to help minimize rate increases during tough economic recessions. Learn more about the Rainy Day Fund.

Fraud Initiative

L&I will expand its fraud-fighting efforts by participating in a national insurance information exchange with other workers' comp insurers. By cross-matching claim information with workers' comp insurers in other states, L&I can more easily identify duplicate claims. The bill also requires L&I to address abusive billing practices by medical providers. Learn more about the Fraud Initiative.

Performance Audit

The Joint Legislative Audit and Review Committee (JLARC) will conduct a performance audit of the workers’ compensation claims management system, including self-insured claims. Learn more about the Peformance Audit.

Occupational Disease Study

An independent study will look at occupational disease claims in Washington. Learn more about the Occupational Disease Study.

Statewide provider network and COHE expansion

Senate Bill 5801, signed into law on March 14, 2011, focuses on getting the highest quality care to injured workers. This legislation creates a single, statewide provider network and required credentials for providers who treat injured workers. It also expands the Centers of Occupational Health and Education (COHE), which specialize in treating injured workers. By the end of 2015, all injured workers in Washington will have access to a COHE. Learn more at Creating a new provider network and expanding COHE.

What happens next?

More information will be available soon. Check back here for updates. For more information or questions, contact Public Affairs.

Previous changes to improve workers' compensation (Senate Bill 5801)

Workers' compensation changes to improve outcomes for injured workers

Learn more about other 2011 legislative changes to create health-care provider networkers and expand the Centers of Occupational Health and Education (COHE).

Q&A about the provider network and COHE expansion

See how L&I is taking steps to rein in costs.

Letter to health-care providers (PDF 168KB)

Learn what L&I is communicating to health-care providers about these changes.

Summary of Senate Bill 5801 (PDF 168KB)

Read a summary of the bill.

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