Unfortunately, after the good news earlier this week about how much money ESB 5566 (passed by the Senate, but so far stalled in the House) would save the workers’ compensation system, the governor decided to put forward a different set of reform proposals that do not include the full option for voluntary settlement agreements. (For more information on those, see here.) Although bill language is not yet available, the proposals reportedly include ideas that were part of the original SB 5566, before it was amended to include voluntary settlement agreements.
The new proposal consists of (with estimated four year figures):
- Washington Stay-At-Work Program (-$111 million)
- Permanent Partial Disability (PPD) award reduction in cases where PPD benefits were awarded previously (-$133 million)
- COLA freeze for pensions (-$259 million)
- Pension reduction when the worker receives Social Security benefits (-$247 million)
- Disability settlement option for certain workers over 55 (-$59 million)
- Limiting pensions when a worker has some earnings (-$2 million)
- Safety and Health Investment grants ($10 million)
- Rainy day fund
According to the governor’s office, the package would save $409 million in FY2012 and $1.02 billion over 2012-15. Those numbers include the savings from medical provider networks and COHEs, which were already enacted in SB 5801. That means that the actual number of savings from these new proposals, as provided by the governor’s office, are $368 million in 2012 and $802 million over 2012-15.
Compare those numbers (which include actual benefit cuts) to the numbers for ESB 5566. That bill would save $622.4 million in 2012 and $1.26 billion over 2011-13. Additionally, it would save $548.7 million over 2013-15 and 2015-17 each.
The voluntary settlement provision of ESB 5566 alone would save $242.6 million every year, plus a one-time liability reduction of $727.8 million.