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Time to move state workers comp toward sanity

Post by Patrick O'Callahan on March 13, 2011 at 6:04 pm |
March 11, 2011 6:06 pm

This editorial will appear in tomorrow’s print edition.

Year after year, Washington’s workers compensation system has lurched closer to financial collapse – even as the payroll taxes that fund it have escalated relentlessly. Year after year, the Legislature has done nothing about it.

This year, though, the state Senate has taken an important step toward controlling those taxes and preserving the system’s solvency. It has passed a bill – supported by Democrats and Republicans alike – that would let injured workers take lump sum settlements and also subsidize businesses willing to return them to work with lighter duties.

What happens to this bill in the state House is a test of whether its Democratic leaders are willing to step up to a crisis in the face of baffling union opposition. So far, they haven’t even given it a hearing.

There’s not much controversy over the subsidy part of the bill. But the lump sum provision, which should not be controversial, appears to be getting turned into a litmus test of loyalty to organized labor.

The fact is, the Senate – which is run by Democrats – went out of its way to make the lump sum option fair to workers.

It is strictly voluntary; injured workers would remain free to collect the traditional checks from the Department of Labor and Industries. The settlements would have to be approved by the state Board of Industrial Insurance Appeals, which would provide an advocate for any employee who isn’t represented by an attorney.

There’d be a 12-week “cooling off” period after an injury to ensure that companies couldn’t stampede workers into premature decisions. If their medical conditions got worse, the settlements could be reopened.

This proposal came from a Democratic governor, Chris Gregoire, and is supported by Lisa Brown, the Senate’s Democratic majority leader. Forty-four other states, blue and red, already offer the lump sum option; Washington is an outlier in denying workers a choice on the matter.

Pragmatic Democrats have joined Republicans and business leaders in supporting this measure for an excellent reason: It promises to help contain the costs of a system that has long been on an unsustainable trajectory.

As things stand, the state grants lifetime pensions at a far higher rate than any other state. Workers injured badly enough to miss more than three days of work wind up on assistance from the Department of Labor and Industries for more than 250 days.

The money’s got to come from somewhere. Mostly it comes from raising the taxes that employers and employees pay into the L&I funds. The rates keep going up – but not fast enough to keep up with claims, so there’s an unfunded liability embedded in the system like a time bomb.

The L&I taxes discourage businesses from moving into and staying in the state. By providing an attractive – and, repeat, voluntary – alternative to traditional compensation, fair lump sum payments would provide certainty to businesses and workers alike and help nudge Washington’s workers comp costs closer to what other states pay.

Is that so scary? The House should let its members vote on the measure.

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