On Saturday, the state Senate passed ESB 5566, which makes reforms to the workers’ compensation system.  Among other changes, the bill would allow injured workers to choose a voluntary settlement agreement instead of taking a permanent pension.

Such permanent pensions are a drain on the system.  As part of the governor’s workers’ compensation reform proposals earlier this year, a policy brief on the subject stated that

one of every 19 time-loss claims becomes a lifetime pension—a rate that has doubled in the past 10 years.  And lifetime pension claims comprise half of all workers compensation costs.

In fact, when it comes to pensions, Washington is an outlier. In 2009, the state fund awarded 1,542 total permanent disability (TPD) pensions, while Oregon awarded 13.  A 2008 study by the Upjohn Institute found that Washington has “two to four times the TPD incidence of the highest other states.”

Allowing for voluntary settlements is something that workers in 44 states are allowed to do, and we have recommended allowing settlements as a way to bring certainty and closure to workers and employers, as well as to reduce costs.