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Aug. 31, 2005

L&I proposes 3.8 percent boost in 2006
workers' compensation rates

TUMWATER — The Department of Labor & Industries (L&I) today proposed increasing hourly workers’ compensation insurance rates by an average of 3.8 percent in 2006. If adopted, the higher premiums would cover anticipated increases in the cost of medical and wage-replacement benefits paid to workers injured on the job next year.

The agency will hold six hearings around the state beginning Oct. 11 for public comment on the proposed increase. (See hearing schedule below.) )L&I Director Gary Weeks will make the final decision on rates in mid-November. The new rates will take effect Jan. 1 and will show up on employers’ first-quarter 2006 billing in April.

Weeks said the modest rate increase is the result of a continued good economy, increased reporting of hours worked in 2005, and lower expectations of future medical and wage inflation. The higher rates would bring in an additional $56 million next year.

Washington’s workers’ compensation system is divided into three funds:

  • The Accident Fund pays partial wage-replacement and disability-award benefits when a worker is injured on the job and can’t work. On average, this rate will go up 12.1 percent.
  • The Medical Aid Fund pays for medical treatment and for vocational rehabilitation counseling. On average, this rate will stay the same in 2006.
  • The Supplemental Pension Fund, which funds additional cost-of-living increases for workers receiving long-term wage-replacement payments, will go down by 16 percent.

The proposed 3.8 percent increase is an average for all risk classifications. How the rate proposal will impact specific industries is available at www.LNI.wa.gov/ClaimsIns/Insurance/RatesRisk/Check/RatesHistory/.

Washington is the only state where workers contribute a substantial portion of the premiums paid into the workers’ compensation system. Under this proposal, their share is just over a quarter of total premiums – on average, about 13 cents an hour.

Labor & Industries manages Washington’s workers’ compensation system and the Washington State Fund. The State Fund provides coverage for about 165,000 employers and two million workers. In addition to providing benefits to injured workers, the system protects employers from the high cost of extended claims and from negligence lawsuits that could otherwise result from workplace injuries.

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Radio broadcast version (:30)
The Department of Labor & Industries today proposed increasing workers’ compensation insurance rates by an average of 3.8 percent in 2006. The agency said the higher rate is expected to cover anticipated increases in the cost of medical and wage-replacement benefits paid to workers who are injured on the job next year.

Five public hearings have been scheduled. L&I Director Gary Weeks will announce a final decision on 2006 rates in mid-November.


Schedule for rate hearings

Spokane

Tuesday, Oct. 11, 10 a.m.
Airport Ramada Inn
8909 Airport Dr.

Yakima

Thursday, Oct. 13, 10 a.m.
Red Lion Hotel Yakima Center
607 E. Yakima Ave.

Mount Vernon

Tuesday, Oct. 18, 10 a.m.
Best Western CottonTree Inn
Mt. Baker Room
2401 Riverside Dr.

Vancouver

Thursday, Oct. 20, 10 a.m.
Red Lion at the Quay
Port Side Room
100 Columbia St.

Tukwila (added hearing)
Monday, Oct. 24, 10 a.m.
L&I Tukwila Office
12806 Gateway Drive

Tumwater

Tuesday, Oct. 25, 10 a.m.
L&I auditorium
7273 Linderson Way S.W.

Written comments on the proposed rate increase need to be submitted by the close of business Oct. 28. Send them to:

Kathy Kimbel, Program Manager Employer Services
Department of Labor & Industries
P.O. Box 44140
Olympia, WA 98504-4140
Or e-mail comments to lanz235@LNI.wa.gov

For more information or to schedule an interview or editorial board meeting with Director Gary Weeks, contact Robert T. Nelson, L&I public affairs, at 360-902-6043 or nelq235@LNI.wa.gov.

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