More reforms for workers’ compensation

Washington’s workers’ compensation benefits paid are the highest in the country, as we’ve documented here and here. And, as the National Academy of Social Insurance says, “several studies . . . demonstrate that the level of statutory benefits is a major determinant of the costs of workers’ compensation in a state.”

In 2011, the legislature enacted a number of workers’ compensation reforms. In a recent Seattle Times op-ed (I wrote about it here), Reps. Hurst and Dahlquist outline some problems with the 2011 reforms that have restrained savings.

The state Senate is now considering a raft of bills on the subject. The Senate Committee on Commerce and Labor held a hearing on them January 23, and passed them out of the committee on January 28.

  • SB 5112 would allow retrospective rating plan employers and groups to schedule medical examinations and consultations, and vocational rehabilitation assessments. The Department of Labor and Industries (L&I) would retain “the final authority over decisions with respect to any individual claim.”
  • SSB 5124 would change the calculation of monthly benefit amounts for surviving spouse benefits, time loss benefits and pension benefits. Currently, these benefits are a percentage of the workers’ wages, with the percentage ratcheting up with marital status and number of children. A single worker with no children receives 60 percent of his wages, while a married worker with five or more children recieves 75 percent. This bill would provide benefits of 66.67 percent, no matter the number of children. Additionally, the cap on monthly benefits would be reduced from 120 percent of the average monthly wage to 100 percent, and health and certain other benefits would be excluded from the definition of wages.
  • SB 5126 would clarify L&I’s access to pain and suffering damages granted to a worker after being injured by a third party. When such a worker is awarded damages, L&I and self-insured employers are allowed to use part of those damages as reimbursement for benefits paid to the worker. A 2010 state Supreme Court case ruled that pain and suffering damages are not accessible to L&I or self-insured employers; this bill would make them so.
  • SSB 5127 would eliminate the minimum age a worker must be to voluntarily agree to a structured settlement. Under current law, a worker must be 55 in order to do so (and 53 on or after Jan. 1, 2015, and 50 on or after Jan. 1, 2016). The bill would also clarify the legislature’s original intent that workers with attorneys are allowed a streamlined process for approval of such agreements.
  • SSB 5128 would replace the existing structured settlement law. Originally, medical benefits would have been allowed to be included in a voluntary settlement agreement, but, as amended on the Senate floor today, they would not be. (They also cannot be settled under current law.) The bill would change return-to-work provisions: Temporary total disability payments would be stopped when an injured worker begins light duty work, and employers would not need to get doctor approval before providing an injured worker with such work.