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Nov. 20, 2001

L&I adopts 2002 workers' compensation rates

TUMWATER - The Department of Labor & Industries today adopted a 1.8 percent general rate increase for workers' compensation premiums in 2002.

"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 will 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 only increase will be in the premiums of 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. The Fund's premiums will increase 10 percent, affecting overall general rates 1.8 percent.

The rate increase will raise an additional $19 million to cover cost-of-living increases mandated by state law. 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.

Hearings on the 2002 rates were held in Spokane and Tumwater. The new rates will take effect Jan. 1, 2002.

The 2002 base rates by class and industry can be found on the Rates and Risk Classifications page.

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