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Sept. 4, 2001

L&I proposes to "hold the line" on 2002 workers' comp rates


TUMWATER - The Department of Labor & Industries is proposing only a 1.8 percent general rate increase for 2002 workers' compensation premiums.

"Our workers' compensation funds remain strong," said L&I Director Gary Moore. "We've been able to hold the line on the two largest funds. The only increase that's necessary will fund cost-of-living increases for those receiving time-loss and pension benefits.

Labor & Industries manages the state's workers' compensation system. It provides coverage for more than 160,000 employers and more than 2 million workers.

The workers' compensation program is made up of several funds that provide benefits when workers are hurt on the job. Both employers and workers pay workers' compensation premiums.

There would be no increase in the two largest funds. The Accident Fund, which provides wage and disability benefits. And, the Medical Aid Fund, which pays medical costs for injured workers.

The proposal would only increase premiums in the much smaller Supplemental Pension Fund. It pays cost-of-living increases for injured workers receiving time-loss or pension benefits. These benefits are adjusted annually based on the state's average annual wage. Its premiums would increase 10 percent; affecting overall general rates 1.8 percent.

The 2002 proposal represents a $19 million general rate increase. Since 1998 premium rate cuts and dividends have reduced workers' compensation premium costs $489 million.

A 1998 legislative performance audit of the state's workers' compensation system reported that Washington pays higher-than-average benefits to injured workers (above the 75th percentile) at lower-than-average cost for employers (below the 25th percentile).

A nationwide study by the state of Oregon last year ranked Washington as the 14th lowest for workers' compensation premium rates.

Public hearings on the rate proposal are set for:

Spokane
9:30 a.m. Oct. 29
Labor & Industries, Conference Room 4
901 N. Monroe St., Suite 100

Tumwater
9:30 a.m. Nov. 2
Labor & Industries, auditorium
7273 Linderson Way SW

The 2002 proposal is an average for all industry groups. Some employers may see decreases and others increases depending on their industry classification and their own claim history.

If approved, the new premiums would become effective Jan. 1, 2002.

Proposed rates by industry classification can be found on the department's web site at www.lni.wa.gov/news/2001/2002rates.htm

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