Major Hurdle Cleared on Path to Budget Print E-mail
Workers' CompEnd in sight after compromise on workers' comp. (Updated)


Governor Gregoire and leaders in both the State House and Senate reached an agreement Sunday evening on the state's workers' compensation system that will save $500 million in 2012 and $1.1 billion through 2015.

The plan will offer "structured settlements" to seriously injured workers age 55 and older. Those injured workers will be able to negotiate settlements and forgo pensions and retraining programs.

Senate Majority Leader Lisa Brown, D-Spokane, said this was the largest reform in the system's 100-year-old history.

House Speaker Frank Chopp, D-Seattle, said this was, "a fair deal to everyone involved," while Senator Janea Holmquist Newbry, R-Moses Lake, said it was a "baby step towards real reform."

The issue is one reason the Legislature is near the end of a 30-day special session, and one reason why the Legislature has yet to reach an agreement on a budget for the 2011-2013 biennium. 

For more details on what's exactly in the agreement, see this story from The Spokesman-Review.

Update: The following details of the compromise are from a press release from Senator Lisa Brown's office:

  • Claim Resolution Structured Settlements: Provides an option for those who are older than 55 to enter into a voluntary structured settlement agreement for their workers compensation claim.

  • Washington Stay at Work Program: Creates a new program to subsidize employers who offer light duty or transitional work. A state fund employer who offers light duty or transitional work can seek reimbursement for 50 percent of the injured worker's wages.  Reimbursement can be provided for up to 66 work days in a two-year period, and the amount of reimbursement cannot exceed $10,000 on any claim. All reimbursements are paid out of the Washington Stay-at-Work Account, which is funded by assessments collected from state fund employers. Up to one-half of the assessment may be collected from workers.

  • Prior disability awards: Benefits for prior disability awards paid to a worker are deducted from the worker’s pension award.

  • COLA Freeze: Freezes the cost of living adjustment on workers’ compensation pensions and time loss for one year.

  • Rainy Day Fund: Creates an industrial insurance rainy day account in the state treasury.  Requires the transfer of workers’ compensation funds whenever the reserves are greater than 110 percent of liabilities. These funds would be available to reduce rate increases during economic downturns or when liabilities unexpectedly increase.

  • Fraud Prevention Initiative: Applies the best practices in place to address employer fraud to workers and providers. Engages in a national information exchange with other workers’ compensation insurers to avoid duplication of claims and benefits. Establishes criteria for periodic review of total permanent disability pension recipients, including their level of disability and physical activity, to determine whether they can be gainfully employed.

  • JLARC performance audit of claims management: Evaluates the extent to which the department makes fair and timely decisions and resolves complaints and disputes in a timely, fair and effective manner. Determines if current claims management organization and service delivery models are the most efficient available. Analyzes organization and delivery for retrospective rating plan participants as compared to nonparticipants. Progress reports are due by December 1, 2012, and December 1, 2013. Results of the audit are due by June 30, 2015.

Update No. 2: A deal on an operating budget has reportedly been reached. Details of the deal will be released tomorrow morning.