Tumwater, WA – The state Department of Labor & Industries (L&I) is proposing a small increase in the average price employers and workers pay for workers’ compensation insurance next year. If the proposal is adopted, it would be the first time in five years that workers’ compensation rates would go up, but on average, premiums in 2022 would still be less than in 2017.
The proposed 3.1 percent overall average rate increase is driven by cost-of-living adjustments for pensions, which were triggered by an increase in the state’s average wage. This is an average, meaning some employers will see their rates go down while others will see larger increases.
“L&I is working hard to help injured and ill workers as they heal and return to work, while managing the additional costs of about 5,600 COVID-19 claims for state fund workers exposed to the virus,” L&I Director Joel Sacks said. The agency, he said, will tap its contingency reserves to keep the proposed rate increase at a minimum.
“With the community’s help, we’ve made sure that we have a healthy contingency reserve so we’re ready to help employers and workers when they need it most, during tough times like we have now,” Sacks said.
“We built our contingency reserve through the premiums we charge and by carefully managing the workers’ compensation program to reduce work disability, keeping costs steady year after year while helping workers heal and return to work.”
Employers and workers pay into the workers’ compensation system to help cover the cost of providing wage and disability benefits for injured workers, as well as medical treatment of injuries and illnesses.
Washington state charges for workers’ compensation coverage based on hours worked. When looking at rates as a percentage of payroll, rates in Washington have gone down from 2012 to 2021.
Tapping into reserves during challenging economic times
In 2021, L&I took steps to help employers and workers reeling from the pandemic by tapping its contingency reserves to avoid an increase in premiums. This approach is also true for 2022. Under the current proposal, L&I will use contingency reserves to cover any gap between premiums and ultimate costs rather than proposing to raise rates even more.
When the pandemic hit, L&I also helped employers by allowing those struggling financially to defer premium payments, a practice that continues today. The agency also ensured the costs of COVID claims do not impact employers’ future rates.
If the proposed rate increase is adopted, the average net rate per $100 of payroll in 2022 will be $1.53, a 1.4 percent increase over 2021. Workers will continue to pay on average about a quarter of the premium, a similar percentage to that paid in 2021.
Public hearing planned
A public hearing is scheduled for 10 a.m. on Oct. 26 to take input on the rate proposal before a final decision is made. To support social distancing, the public hearing will be held virtually this year. Final rates will be adopted by Nov. 30 and go into effect Jan. 1, 2022.
2022 rates hearing
Join Zoom Meeting
Meeting ID: 889 8069 4211
People are encouraged to submit comments in writing to: Jo Anne Attwood, administrative regulations analyst, P.O. Box 41448, Olympia, WA 98504-4148; or email [email protected] All comments must be received by 5 p.m. on Oct 29.
More information about the proposal is available at Lni.wa.gov/2022Rates.
Source: WA L&I