This editorial will appear in Friday’s print edition.
Prospects for reforming the ailing workers’ compensation system got a boost earlier this week from a group of moderate House Democrats.
The coalition – which includes Reps. Larry Seaquist of Gig Harbor, Troy Kelley of Tacoma and Chris Hurst of Enumclaw – has the votes to pass the measure. Eight of them plus 42 Republicans in the House equals a majority.
The question is, will there be a vote? The liberal faction of the House Democratic caucus is up in arms about the attempt to push through some form of lump-sum settlements for injured workers and is threatening retaliatory legislation.
If the newest plan can’t make it to the House floor, it’s hard to imagine the Legislature making meaningful changes to the workers’ compensation system anytime soon.
More than a month ago, a bipartisan group of state senators passed a perfectly reasonable bill that would have helped preserve the system’s solvency while offering businesses and workers alike more certainty.
The Senate bill was projected to save the system $1.2 billion in the first two years – money that would have gone a long way toward shoring up the health of workers’ comp funds and halting the relentless escalation of payroll taxes paid by employers and employees.
But leaders in the House have not given the bill so much as a hearing, owing to the fact that labor picked workers’ compensation as the place to draw its line in the sand.
Unions’ attacks on the proposal have a decidedly paternalistic tone. Critics essentially argue that workers don’t know what’s good for them and if given the option of settling their claims for about 80 cents on the dollar, they might just foolishly take it.
Lump-sum settlements would no doubt prove popular here, just as they have in the 44 states that offer them. Many injured workers prefer to get their money upfront rather than have it dribble out in regular checks. In some places, labor has embraced the choice as a worker benefit, which it is.
The settlements would be strictly voluntary, and several safeguards are built into the proposed system to ensure workers make the decision with their eyes open.
The new House proposal improves worker protections even further. Workers would have to wait six months to settle their claims to ensure that they weren’t pressured into premature decisions. Settlements couldn’t be offered to workers who already have pensions, and lump-sum settlements would be allowed for lost earning power only, not medical claims.
Those changes reduce the possible savings to the workers’ compensation system while still retaining a settlement option that would lend the system greater predictability.
Doing nothing should be out of the question. The status quo – a system in which Washington grants lifetime pensions at an unrivaled clip and where about 85 percent of compensation costs come from only 8 percent of all claims – is not sustainable without huge increases in payroll taxes.
Workers’ compensation costs affect job growth. More double-digit rate hikes could prove far more deleterious to Washingtonians’ ability to support their families than offering payout choice to a few workers who suffer debilitating injuries on the job.