November 1, 2019
The National Academy of Social Insurance (NASI) has released its annual report on workers’ compensation benefits. The report covers data from 2017, and it shows that Washington’s benefit costs per covered worker were $766.59—the highest in the country. (Alaska came in second at $736.55.)
When you consider benefit costs as a percent of covered wages, Washington ranks fifth in the country (1.24 percent). According to NASI, covered wages in Washington increased by 30.5 percent from 2013 to 2017, which was the highest increase in the nation.
Although benefit costs are high in Washington compared to other states, they are declining here (they were $865.67 per worker in Washington in 2010). Last month, the Department of Labor and Industries (L&I) proposed a 0.8 percent reduction in average workers’ compensation premiums for 2020. If adopted, the average rate would decrease for the third year in a row.
Included in NASI’s benefit figures are special funds that are used in some states to “administer WC benefits for specific categories of workers and for workers with particular types of injuries. For instance, there are designated funds for commercial fisherman, workers who contract asbestosis, coal-miners in certain coal-intensive states, and certain other long-term cases.” Washington’s supplemental pension fund is considered such a special fund. The supplemental pension fund provides cost-of-living adjustments (COLA) for workers’ compensation pensions and long-term time-loss benefits.
NASI’s Sources, Methods, and State Summaries companion report notes that from 2013 to 2017,
Special fund benefits increased 5 percent from approximately $828 million to just under $877 million . . . . Special fund totals in the country are driven primarily by Washington state, which accounted for 51.2 percent and 58.2 percent of total special fund benefits in 2013 and 2017, respectively. Over this period special fund benefits grew by 19.3 percent in Washington. Excluding Washington state, special fund benefits paid declined 10.3 percent between 2013 and 2017 in the rest of the country.
Looking back over ten years, Washington’s supplemental pension fund benefits increased by 41.8 percent while total benefits in Washington increased by just 12.4 percent. In 2008, the supplemental pension fund accounted for 16.3 percent of total benefits in Washington. By 2017, that percentage had increased to 20.5 percent. (As part of workers’ compensation reforms made in 2011, the COLAs were suspended for FY 2012.)
As I noted above, L&I is proposing an overall average rate decrease for 2020. The supplemental pension rate component of that would actually increase by 9.4 percent. The COLAs are based on the state’s average wage, which increased by 5.5 percent in 2018.Categories: Categories , Employment Policy.
Tags: workers' compensation