Potential changes for workers’ comp voluntary settlements

In a Seattle Times op-ed over the weekend, two state representatives, Christopher Hurst and Cathy Dahlquist, call for more changes to workers’ compensation. Some reforms to the system were enacted in 2011 (we wrote about them here), and some savings have been realized. As Reps. Hurst and Dahlquist note,

The single largest projected saving from the 2011 reforms was a new voluntary settlement option for certain injured workers. It allows injured workers age 55 and over, after a waiting period and subject to the approval of an administrative judge, to settle the nonmedical care aspects of a worker’s claim for a lump sum by periodic payments. . . .

For the system, the reform was originally projected to save $335 million in 2012, and $545 million through 2015. But only 22 settlements have been made and approved this year. In its 2013 rate-making, the department booked $47 million in savings, a far cry from the $335 million the Legislature was pledged.

Reps. Hurst and Dahlquist point to a few problems that have contributed to the small number of settlements:

The first is the age restriction limiting the settlement option to workers age 55 and over, a restriction found in no other workers’ compensation system.

Unfortunately, the age restriction has arbitrarily and unfairly limited the population of workers in the system eligible to take advantage of this voluntary benefit. . . .

Second, the settlement program has been misinterpreted by the board charged with approving settlements. The Legislature provided an intensive approval process for injured workers with no legal representation. The law also provided a streamlined process for workers with attorneys.

Unfortunately, the board has rejected the streamlined process for workers with attorneys. This has caused delays and uncertainty in the settlement process for the legal community and casts a chilling effect on employers who are considering settlements with workers.

Although current law seems very clear on this point, to address this problem, a new bill includes an additional clarification that workers with attorneys are in fact allowed a streamlined process for approval. The bill would also eliminate the age limitation for voluntary settlements.