Last fall, Washington voters overwhelmingly rejected Initiative 1082, a business-backed measure that sought to take away the state monopoly on workers’ compensation insurance. The initiative would have allowed employers to purchase insurance on the private market.
While rejecting the initiatives, residents made it clear that they expected changes in the current injured-worker system, which is inefficient and in financial jeopardy.
Gov. Chris Gregoire heard that message and has submitted a comprehensive reform package that merits support in the state Legislature.
The Olympian’s Editorial Board urged South Sound residents to oppose the initiative because it would have virtually eliminated oversight of workers’ compensation claims and left injured workers in the lurch. I-1082 also would have been a terrible hit on small business owners – increasing their tax burden at a time when many were barely hanging on.
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Nearly 60 percent of the voters statewide agreed, overwhelmingly rejecting Initiative 1082.
At the time of the campaign, this newspaper and others called on the state Department of Labor and Industries to reform the workers’ compensation system to improve its efficiency, put the trust funds on sound financial footing, reduce the bureaucracy and tackle the problem with too many workers on long-term disability.
The system is teetering because 8 percent of the people who file workers’ compensation claims are on long-term disability. They drive 85 percent of incurred benefits costs. In the past decade, the number of disability claims that have become pensions has doubled.
Both business and labor agree that problem must be addressed. They have different ideas how to accomplish that. Gregoire has put forth a plan (Senate Bill 5566) that is estimated to save the state $720 million over four years.
Simply put, there are some people in this state who see Labor and Industries’ injured worker program as an entitlement. They believe if they are injured at work, they deserve a lifetime disability check.
Truth be told, the current workers’ compensation system encourages that thinking. There are few incentives to get the injured worker back on the job in a timely fashion so the worker can be a productive citizen again.
Gregoire’s workers’ compensation reform legislation, which is being pushed by L&I Director Judy Schurke, is both smart and pragmatic. The reforms are aimed at encouraging people to get back to work and to reduce the number of claimants who are on long-term disability.
Under the governor’s plan, the state would:
• Create a network of health care providers who specialize in occupational health issues who would be trained and expected to follow best practices to getting workers back to work.
• Expand the state’s four Centers for Occupational Health and Education, which have a proven track record of getting people back on the job quicker and at less expense.
• Adopt the Oregon model where injured workers are expected to stay on the job while they are recovering. An employee with a broken arm, for example, would be put into a transitional job where mobility is not necessary. Employers would receive a subsidy from the state to help offset part of the worker’s wage while the employee is recovering from his or her injury.
• Create early return-to-work programs and encourage innovative projects to prevent workplace injuries.
• Allow injured workers 55 and older to take a disability settlement in lieu of retraining and disability benefits.
• Limit certain pensions to Social Security retirement age instead of a lifetime benefit.
Key to the success of the reforms would be an outside study that would show definitively what’s working and what’s not in driving down long-term disability and other injured worker claims. Study in hand, Labor and Industries could build upon its best practices.
Not surprisingly, the governor’s plan has met opposition from both organized labor and business leaders. Labor officials don’t like benefit cuts. Business leaders don’t believe the governor has gone far enough. When both sides find fault, that, to us, shows that the governor has found an acceptable middle ground.
It was clear from last fall’s election campaign that reforms are warranted within Washington’s workers’ compensation system. Gregoire and Schurke have proposed meaningful reforms that will – if enacted in their entirety – correct problems in the system, improve efficiency, get workers back to work in a timely fashion, and reduce the sharp increases in workers’ compensation rates that are hindering businesses and working against job retention and creation in this state.